Strategies of Agrarian Companies in Ukraine: Black Sea Grain Conference 2015 Clarification
We would like to thank all the participants of Black Sea Grain Conference 2015. We value our clients and hope for fruitful cooperation in the future. Having stated that, we have been receiving large amount of feedback regarding information, presented during the conference, namely presentation regarding Strategies of Agrarian Companies in Ukraine, prepared by Financial Analyst of UkrAgroConsult Alex Morgun. Based on the feedback provided, we would like to clarify several crucial points:
When calculating financial ratios for the companies, calculation periods were taken within the timeframe of 2014, however not the same periods for each company. The main reason for such approach is the fact that most companies who are audited on a calendar year basis have not yet released annual reports for 2014, thus the most recent data was selected.
That being said, such an approach could inevitably lead to misinterpretation of the financial position for several companies, mainly due to their business model and operating cycle. For instance, asset turnover ratio and net revenue margin for Agrogeneration were calculated based on semi-annual reports for 1H 2013 and 1H 2014 (not full operating cycle), without taking into consideration the fact that most pure commodity crop producers generates most of their sales in the second half of the financial year (as it did during 2013 financial year).
Such calculation led to non-representative results. High share of change from biological assets of the company is related exactly to the company’s operating cycle and assessment method of biological assets (FV of BA). Therefore, we would like to stress that complete analysis of Agrogeneration requires a more objective comparison with an in-depth look at several years’ worth of financial data, rather than the snapshot, featured in our presentation.
We hope that this superficial analysis will not affect the company's reputation. We highly appreciate Agrogeneration’s forthrightness in clarification of the company’s financial position.
We are glad to clarify any misunderstanding that might appear when viewing presented numbers and assist with further, more detailed research.
UkrAgroConsult would like to thank all the participants of Black Sea Grain Conference 2015 and our clients for holding our company to high performance standards we are aiming to reach. We hope that our services will continue adding value to your operations in the future.