Agriterra Ld Share Discussion Threads

[cyfran101] 02/3/2014 20:53

3 of the top ten (by population) cities covered by our retail units, I imagine Nampula will be next.

[tenapen] 02/3/2014 19:10

Maybe Agriculture stocks could be one of the few sectors that benefit from trouble in the Ukraine !.

hxxp://www.agrimoney.com/marketreport/ukraine-fears-lift-corn-wheat-prices.-soybeans-rise-too--2525.html

Ukraine fears lift corn, wheat prices. Soybeans rise too

Farm operator Trigon Agri may believe that Ukraine's unrest may end up being good for the country's agriculture sector

Cont...

[cyfran101] 28/2/2014 00:26

The palm oil plantation seem to have slipped out of their thoughts as that had barely a comment. Maybe they realise they have to maintain focus on Beef & Cocoa and that's where they want to make all their investment.

With the development of Western Africa as a burgeoning palm oil area and the Far East land constrained maybe they are going to sell that part off at a good price?

[swooped] 27/2/2014 12:22

wrong, well partially, they reduced their losses due to better process management but their losses reduced by 50% their revenue did not decrease by as much.

[here and there] 27/2/2014 11:16

they reduced their losses because they had reduced revenue...the more they trade...the more they lose

[oiht] 27/2/2014 10:57

I differentiate between 'cash burn' and 'investment'.
I'm in a couple of other companies, who have been 'investing' over the last several years and only now are the shareholders starting to reap the rewards BUT it's taken a long time.
I'm also in another, where they're just spending money to pay the directors, or so it seems.
IMO AGTA belongs in the former category. (investing that is)

[amt] 27/2/2014 08:52

10m cash burn in 6 months. At that rate a placing will be required in the next month or two.

[thomcooper] 26/2/2014 21:30

This is the main reason I am in this:

[swooped] 26/2/2014 18:39

Seems the general market focus is on how well they have reduced the losses

hxxp://www.morningstar.co.uk/uk/news/AN_1393405905966605700/agriterra-pretax-loss-narrows-on-lower-costs-.aspx

LONDON (Alliance News) - Agriterra Ltd Wednesday said its pretax loss significantly narrowed in its first-half as lower costs offset a fall in revenues.

The pan-African agricultural company with established beef, cocoa and maize trading operations said its pretax loss halved to USD2.1 million for the six months ended November 30, from USD4.2 million the previous year, despite a 37% fall in revenues to USD7.2 million from USD11.5 million the previous year.

The company said its fall in revenues was due to lower maize and cocoa sales volumes as the company focuses on developing operations in order to achieve strong production and revenues in the coming years.

However, Agriterra said its cost of sales fell 35% to USD6.4 million in the first-half from USD9.9 million the previous year as margin improvement in its grain business and positive impact in its beef business at both its retail units and the organic growth in its herd, helped the company's costs.

The company said it expects revenues to ramp up with investment programmes continuing, delivering enhanced financial performance moving forward.

Agriterra shares were up 1.7% to 2.11 pence Wednesday.

By Tom McIvor; [e-mail]; @TomMcIvor1
- See more at: hxxp://www.morningstar.co.uk/uk/news/AN_1393405905966605700/agriterra-pretax-loss-narrow

[swooped] 26/2/2014 18:35

[...]

Agriterra reduces losses as growth plans take hold
By Giles Gwinnett
February 26 2014, 7:52am


Improving cost efficiencies and focus on margin improvement in the grain business helped pan-African agricultural business Agriterra (LON:AGTA) reduce losses in its latest half year.

The pre-tax loss on continuing operations narrowed by 50% to US$2.1 million for the six months to Nov 30 last year compared to US$4.2 million in the same period in 2012, the firm revealed, adding that there was a trend towards profitability across all divsions.

It is mainly focused on expanding the growth divsions of cocoa and beef.

In Mozambique, its cattle herd expansion programme is on track to reach 10,000 head (excluding feedlot animals) by 2015 and a successful breeding season has delivered a 75% year-on-year increase in births.

In Sierra Leone, at the cocoa plantation, 350,000 seddilings are now growing in 1.7 hectares with the next phase of planting, on 250 hectares, expected to be completed in 2014.

"Based on our current planting schedule and land acquisition strategy, we anticipate that the plantation will yield at least 8,000 tonnes of premium grade cocoa beans by 2020/2021," Agriterra said.

Revenue in the period decreased to US$7.2 million versus the comparable period of US$11.5 million reflecting lower maize and cocoa sales volumes, but the net assets of the group stood at US$57.5 million at period end. That's against a market cap of US$36.7mln.

"Agricultural businesses are based on long term investment and the realisation of a growth strategy. While we are still in the investment phase in both our beef and cocoa businesses, the board is confident that the progress we have made to date has created a strong and sustainable platform for our transition into profitability," the company said.

[thomcooper] 26/2/2014 11:50

vyke82 - I don't think theres likely to be. The news has downwards pressure IMO, but at its current price, theres little to take out of the share price. You might see it drop 25% over the coming months, but I can't see it go much further down.

[thomcooper] 26/2/2014 11:42

I've only just got in & am holding as political problems aside, there is a hard asset behind this which isn't going to devalue that much.

I am expecting to see a push towards profitability within 12 months & hopefully a decent foreign supply contract.

Opal-Whilst the Cocoa in Sierra, I'm more worried about a large amount of Capex going into a country that has so few years of meaningful democracy. I believe that the project should be developed & that Cocoa has huge upside potential over the coming 5 years or so, but if things did go wonky politically (which is probably more likely than in Moz), then there is a lot at stake.

Therefore, I think they'd be wiser to invest here more slowly & keep the cash reserves more intact. Taking on debt or asking shareholders for some dosh to fund ongoing operations should be a thing of the past now with this co. as they have all of the infrastructure.

The cocoa is going to be a drain for years. IMO, they'd probably be best placed to drive the beef into profitability, & then focus on expanding the cocoa.

I don't mind not getting a divi, if I can see the co. balance its books & expand. Having seen these results I'm a little more cautious.

[the count of monte_cristo] 26/2/2014 11:06

Be good to see the directors increase there small holdings. I can see the company being sold in 2-3 years, once they show they can consistently turn a profit. Also during the coming year I would expect to see a strategic investor come in like you have seen with OBT and ZAM I believe. This is a long term investment for the very patient investor....of which there are few these days (above posters excluded of course).

[swooped] 26/2/2014 10:52

Oh and I might add.

In addition to our current operations, the Board continues to actively pursue the realisation of value from its legacy oil and gas operations. In this regard, we are engaged in formal arbitration proceedings with the Government of the Republic of South Sudan and Nile Petroleum Corporation to recover the compensation assessed by the National Petroleum Commission as being due to the Company for works undertaken by the Company and acknowledged as being due by the Ministry of Petroleum and Mining of the Republic of South Sudan in April 2012. In addition, Tullow Oil plc, Africa Oil Corp and Marathon Oil Corporation ('Marathon') continue to undertake exploration activities on the South Omo oil block in Ethiopia. An additional payment of US$10m will be due to Agriterra from Marathon in the event that Marathon participate in a "commercial discovery" on the block. The timing and exact quantum of any amounts recovered in respect of these assets cannot be reliably estimated at this time and they are accordingly not included in our financial results.

The fact that these figures are NOT INCLUDED in the financials is very good, if this does come in it's a pure bonus and straight to the bottom line, though not holding my breath on that one.

[swooped] 26/2/2014 10:48

you should have said "only a clown would TRADE in this" as an investment its a very good stock to hold, if your looking for day trading opportunities or very short term gain I agree go and look at GKP, but as a longer term investment this is for me a very good opportunity, a huge amount of investment has already occurred and the business will soon reap the rewards as will the shareholders getting in at this stage. I'm very happy to sit and wait all the signs are IMO positive, reduced losses, increasing demand, what's not to like?

[vyke82] 26/2/2014 10:48

No reaction to the results

[apache_dropout] 26/2/2014 10:09

Only a clown would invest in this rubbish.

[opaldouglas] 26/2/2014 10:08

N3tley,

You say cash drain I say business investment.

Fact of the matter is AGTA have had to inject a large amount of CAPEX into operations to grow, beef doesn't grow on trees and cocoa plantations don't plant themselves. Of course I'm jesting but you get the idea.

In order to build a long term sustainable business, infrastructure has to be built, herd size increased, successful cattle breeding, irrigation, retail outlets secured etc etc. This all requires money.

AGTA were never going to make a profit this year, the various MC Peat research notes make this abundantly clear. CAPEX should start to reduce significantly next year and I suspect profits are likely from 2016 onwards if AGTA are successful.

I agree with you that the company is always in "investment stage" as it has always been in investment stage thus far, but in my view the business is progressing well and AGTA can move into sustainable profits within the next 2/3 years.

I expect bumps in the road (this is Africa) with political problems and alike as per this year in Mozambique but AGTA is a 5 year plus investment and one I'm happy to sit quietly in my portfolio.

I do however respect other opinions and hope you remember your post in years to come ;)

OD

[thomcooper] 26/2/2014 09:29

N3ley has a point about the cash. They've burnt through the big cash pile they had from the sale of the oil co. & then some.This is a downside in my view. I believe that their operation is oversized for Moz at mo & they need to be exporting. Although op-ex was down, so is turnover, which is not ideal for a growth business that is ramping up production.I'm in here & will top up if it falls much lower, but they need a big export partner to allow them to fill the extra capacity. I wouldn't be surprised if they run out of cash in the meantime though & need to raise a few extra bob.I do dis-agree with N3... Re not being a growth stock. That's exactly what I see this as, but they need to be shopping for international customers.

[swooped] 26/2/2014 09:03

Agricultural businesses are based on long term investment and the realisation of a growth strategy. While we are STILL in the investment phase in both our beef and cocoa businesses, the board is confident that the progress we have made to date has created a strong and sustainable platform for our transition into profitability. The Company has reduced its losses significantly, reflecting in part the refinement of our cost efficiencies, our focus on margins and the increasing scale and integration of our beef operations. As revenues begin to ramp up and our investment programmes continue, we are in a favourable position to deliver enhanced financial performance moving forward.


The African agriculture arena remains an area of exceptional growth potential, and our investments to date in both Mozambique and Sierra Leone will, I believe, set us at the forefront on this expanding industry.

Good enough for me, I understand how long these things take and an operation of this size takes time to get to critical mass, however the pre-tax loss on continuing operations decreased by 50%, that's a big drop (revenue was not a 50% drop), it shows me they are managing this well whilst keeping it as lean as possible. We are in at the bottom here and so there is only one direction of travel.

[n3tleylucas] 26/2/2014 08:37

Opaldouglas,

Your reaction is the same as every reaction after a poor set of AGTA results and relentless cash drain.

I do expect a company with a business of selling goods or services to make money, yes.

The problem here is it's always an investment stage, and eventually all that cash mountain they had has gone and has never made a cent.

Mark my words mate, this lot will never make money... it's ego, power, control... but it's not making money.

Trade it and have fun, but a serious LT growth stock this ain't.

And when all the money's gone, and they return to the market with the begging bowl, share price much lower and propose a consolidation... remember this post.

[opaldouglas] 26/2/2014 08:14

N3tley - Surely you didn't expect profits at this early stage?!?

[here and there] 26/2/2014 08:05

the key financial conclusion. as long as revenues drop, losses also go down......!

[ged5] 26/2/2014 08:03

It looks like they are making steady progress overall.

The new outlet seems promising as does all the beef business.

Cocoa developing but longer term.

Dissappointed with the drop in revenues but they've had a couple of good seasons with the maize. there was bound to be a drop off at some point.

Short term for me doesn't matter. I've tried to forget about these until after the elections.