Q3 2024 Astarta Holding PLC Earnings Call Transcript
Key Points
- ASTARTA Holding NV (WAR:AST) reported a stable EBITDA margin of 30%, supported by strong development in biological assets.
- Operating cash flows increased by almost three-quarters to EUR136 million, allowing continued investments in agriculture and sugar making.
- The company is building a new silo for sugar preservation, enhancing quality for premium export markets.
- Soybean processing maintained a steady margin with a gross margin of 33% and an EBITDA margin nearly 30%, despite lower prices.
- Cattle farming is growing, with increased milk production and favorable pricing due to market consolidation.
- Soybean processing revenues declined due to lower prices for soybean products.
- Weather conditions negatively impacted crop yields, with average yields down by 15% to 25% for corn, sunflower seeds, and soybeans.
- Sugar production faced a challenging pricing environment, with gross margin contracting from 29% to 24% and EBITDA margin halved compared to last year.
- The decline in local sugar prices over recent months has affected profitability, with a 20% drop compared to last year.
- Electricity supply issues in Ukraine pose a risk to production facilities, although mitigated by backup systems and renewable energy initiatives.
I suggest -- we're still letting people into the room, so just bear with us with a couple more minutes. We would like to ask everyone to be on mute, given the number of people online, so that we do not have interference. And after a very brief presentation of our nine-month results, we'll go into Q&A which we will also ask to be in writing in the box so that we can read it out for everyone.
So we start with our revenues. One can see that we managed to increase our top line in all business segments except for soybean processing. This is a technical -- because of the lower prices for soybean products.
Profitability remains solid on a gross and EBITDA margin. If we are talking about our EBITDA margin, it is stable at 30% courtesy of strong development on the biological assets growing in the ground. And our net profit margin even expanded from 14% to 17%. Without IS41 effect, we also show our profitability on the same page. And it is slightly lower on the gross margin level at 37% and slightly lower on EBITDA margin.
Talking about our cash flows, we
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