EBITDA of Agrokor Group in five months 449.4 million kuna

The Agrokor Group recorded an operating profit of 449.4 million kuna in the first five months of this year, which is 10.5 percent above plan, according to the latest monthly report from the extraordinary administration, which highlights the voting on the settlement as the most important news.

Published on Wednesday, the 15th monthly report from the extraordinary administration covers the period from June 11 to July 11 and monitors the economic and financial situation as well as the implementation of measures from the extraordinary administration in Agrokor.

>>> Agrokor achieved 10 percent higher operating profit than planned

“The key event of the reporting period is the conclusion of the most important phase of the extraordinary administration process in Agrokor related to achieving the Creditor Settlement. After 14 months of proceedings and six months of intense negotiations with creditors, on July 4, 2018, a hearing was held for voting on the creditor settlement in Agrokor. The settlement was voted for with 80.20 percent of total claims, or 27.07 billion kuna out of 33.76 billion kuna of total claims filed in the extraordinary administration process. The achievement of the settlement voted by the majority of creditors has fulfilled the key goal of the extraordinary administration within the legally prescribed timeframe,” the report emphasizes.

The Commercial Court in Zagreb announced the decision to confirm the settlement on July 6, according to which the deadlines for filing lawsuits last until July 23.

“Upon the finality of the decision by the High Commercial Court, which is expected during October, the implementation of the settlement will begin, with a planned duration of between three and six months,” the extraordinary administration emphasizes.

They state that this is a technically very demanding process in which more than 70,000 steps have been identified to date – from the establishment of mirror companies and the transfer of assets to them, to the transfer of all types of contracts with employees, suppliers, and all business partners.

“The start of operations of the new group and mirror companies is planned for the beginning of next year. However, achieving this goal primarily depends on when the settlement becomes final, which is entirely in the hands of the court,” notes the extraordinary administration of Agrokor.

They also reiterate that “achieving the settlement has enabled a new future for Agrokor, the preservation of jobs, and future sustainable business.”

In a statement that Agrokor published along with the monthly report, it is announced that the extraordinary administration will, in the upcoming period, in addition to organizing and controlling the process of preparing the implementation of the settlement, further focus on the operational business of the companies, increasing revenue, profitability, and efficiency, given the good trend that business has recorded in the first five months.

Agrokor Group with higher operating profit than planned

According to the data from the report, the Agrokor Group recorded an operating profit of 449.4 million kuna in the first five months of this year, which is 10.5 percent higher than planned.

The data further shows that the food and agriculture sectors as well as the retail and wholesale sector operated positively in the first five months.

Thus, the retail and wholesale sector, which includes four companies, achieved 4.93 billion kuna in sales revenue in the first five months, with EBITDA (operating profit, excluding management fees) of 3.3 million kuna, according to preliminary data from the report.

The largest company in that sector – Konzum achieved sales revenue of 3.3 billion kuna and EBITDA of 42.6 million kuna in the first five months.

>>> Agrokor: Voting on the settlement was merely a technical issue

Konzum is stabilizing its operations and fully realizing the set plans and goals, the report states, highlighting the data for May in which “a visible trend of customer return is evident, with 6.5 percent more customers compared to the comparable retail network in 2017.” “A larger number of customers, along with an increase in the average basket by 11.3 percent, resulted in a higher turnover than in May 2017 by 18.5 percent in the comparable retail network,” the data from the report shows.

Tisak had revenue of 717 million kuna in the first five months, but also a negative EBITDA of 11.3 million kuna, while Velpro Centar, with revenue of 379 million kuna, recorded a negative EBITDA of 16.9 million kuna.

Preliminary data for the period from January to May show that Agrokor’s food sector, which includes nine companies, achieved 2.93 billion kuna in sales revenue and EBITDA of 381.3 million kuna.

Within that sector, PIK Vrbovec achieved sales revenue of 666 million kuna and EBITDA of 55.4 million kuna in the first five months, Jamnica 427 million kuna in revenue and EBITDA of 82.3 million kuna, while Ledo operated with 400 million kuna in revenue and operating profit of 59.3 million kuna. Zvijezda, on the other hand, achieved sales revenue of 271 million kuna and EBITDA of 26.2 million kuna.

>>> The settlement on Agrokor has been voted

Agrokor’s agriculture sector, which includes three companies, achieved sales revenue of 813 million kuna and EBITDA of 64.7 million kuna in the first five months. The highest revenue in that sector was achieved by Belje, 469 million kuna, with EBITDA of 47 million kuna.

Extraordinary administration costs

According to the report on the costs of the extraordinary administration and the operations of Agrokor d.d. (which are stated without VAT), the total cost of consultants in May amounted to 110.56 million kuna, which is an increase compared to April when they amounted to 22.48 million kuna.

As explained, the increase in operational costs for May was most influenced by legal/attorney fees, which amounted to 75.1 million kuna in May (in April 8.2 million kuna), and restructuring costs, which amounted to almost 19 million kuna (in April 12.2 million kuna).

>>> Vidaković: Agrokor should remain a unified system, the most demanding phase follows

“Consultant costs from May onwards include new consultants who have been engaged for the final phase of the process. The new consultants include McKinsey (for restructuring), PJT&FTI (for finance), and AKIN Gump (legal advisors),” the report notes.

From the entry of the extraordinary administration into Agrokor, i.e., April 10, 2017, until the end of May this year, the total costs of Agrokor d.d., which include fees to the commissioner as well as salaries and bonuses for employees, then consultant costs, auditing and tax services, and overhead costs, amounted to 749.1 million kuna. Of that, the largest part, 454.4 million kuna, relates to consultant costs during that period.