Release Date: August 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- ASTARTA Holding NV (WAR:AST, Financial) maintained a respectable EBITDA margin and net profit margin despite declining soft commodity prices.
- The company's balance sheet remains conservative with a net debt-to-EBITDA ratio below 1, and operating cash flows totaled EUR116 million.
- Cattle farming contributed to revenue increases, with strong prices for premium milk and growth in herd size and yields.
- Soybean processing showed resilience with steady production volumes and margins, despite lower meal and oil prices.
- ASTARTA Holding NV (WAR:AST) successfully exported nearly 120,000 tonnes of sugar to European markets, indicating strong export capabilities.
Negative Points
- Lower soft commodity prices and adverse weather conditions negatively impacted agricultural results, affecting both spring and late crops.
- Profitability in the sugar segment is lower due to global sugar price declines, despite maintaining good gross margin levels.
- The harvest forecast for sugar beet and corn remains uncertain due to extremely dry weather conditions.
- The expected harvest for soybeans is uncertain, with a range between 4.6 million to 6 million tonnes, influenced by unfavorable weather.
- The company faces challenges in the sugar segment with lower global prices and uncertainty in harvest forecasts, impacting future profitability.
Q & A Highlights
Q: How much of export-oriented deals were contracted for sugar for the second half of 2024?
A: We will not give the precise number, but these are tens of thousands of tonnes of sugar. The pace is similar to the last marketing year, but now we are focusing on MENA markets.
Q: Considering the company's strong financial position, does the company intend to pay in advance on the dividend?
A: We are focusing on the stability of our operations and strive for a stable and predictable dividend policy, which is still in place.
Q: Could you comment on the drivers for second-quarter agriculture EBIT and the contribution of crops sold externally versus internally?
A: It is more meaningful to look at the overall marketing year. We sold about 700,000 tonnes of grains and oil seeds, with one-third being third-party volumes. The second quarter was the end of the marketing season, and Ukraine had already run out of grain and oilseed stocks.
Q: What was the difference in profitability of sales of sugar locally and internationally in the second quarter?
A: There was a rebound in local sugar prices due to seasonal factors, contrary to the global trend of declining prices. The volatility of local prices will depend on the sugar beet harvest in Ukraine and global market prices.
Q: Is the company considering a share buyback program, and what are the plans with already accrued shares?
A: We are paying a dividend, and since we started paying a dividend, we curtailed the buyback program. The treasury shares on our balance sheet are a small percentage, and we are considering our options since migrating from the Netherlands to Cyprus.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
