Landkom Share Discussion Threads

[loverat] 07/9/2011 09:01

I remember in my history lessons learning that Ukraine was the 'bread basket' of the Former Soviet Union. More like basket case.

[giant steps] 07/9/2011 08:51

very disappointing results today

[felix99] 07/9/2011 08:43

rofl - if thats a good harvest gawd help you when they have a bad one is all I can say. How do you reckon that rapeseed harvest was good ?

As rivaldo says they are now in juglging cash mode - so it iwll restrict next years output unless they go and raise some fresh cash - which lets face it the City boys will want to dilute existing holders down royally for the risk

[envirovision] 07/9/2011 08:29

Some of the posters on this board ought to be ashamed of themselves for talking about fiction as fact and for such miss leading statements:


tim000 - 3 Sep'11 - 07:02 - 1994 of 2016

I think you're all being unfair on the company at the moment. The harvest has been a good one, no doubt about that.

[darcon] 07/9/2011 08:27

My worst fears confirmed. They sat on this news and let insiders sell out before us.

[rivaldo] 07/9/2011 08:20

Commiserations to holders. As an ex-holder, given the previously positive news flow I was expecting better and certainly didn't see this coming.

This in particular is awful - discounted fundraising coming up?

"The financial implications of a lower than anticipated rapeseed harvest are being assessed. The Board is now reviewing the Group's strategic options."

and LKI "will need to manage its cash flow carefully".

[felix99] 07/9/2011 08:16

Sorry for holders. Couldnt imagine a worse update and as Shanklin said the seller clearly knew about the Rapeseed diappointment in my view. Under 3p would be fair price imho. Think buying at 3.75 is a bit early but good luck

[divinausa1] 07/9/2011 08:13

yup rapeseed yield was bad but still...


Gross profit on rapeseed crop expected to be approximately $3.1m (2010: $2.2m)

· 60,600 tonnes of wheat harvested, with an average yield per ha of 3.3 tonnes (2010: 3.0 tonnes per ha)

· Gross profit on wheat expected to be approximately $1.4m (2010: loss $0.1m)

· Other harvest crops, including 10,500 ha of maize, to be harvested in October

[divinausa1] 07/9/2011 08:11

in at 3.75p

[beeks of arabia] 07/9/2011 08:06

Aye - poor results.

I smell a Ukrainian rat somewhere, so wouldn't right them off just yet.

[shanklin] 07/9/2011 08:04

Out at 4.11p. How long had they known about the rapeseed crop?

[hectorp] 07/9/2011 08:00

Ouch, no profit in 2011. Going to halve today?

[tim000] 07/9/2011 07:39

very surprising on the yields, hadn't seen that coming. Everyone else in Ukraine had reported very good results.

[theophilus] 07/9/2011 07:39

They may look tempting at a lower price. But I would not touch them until I see some some big buys moving the price up ie. the reverse of what has happened this year with big sells sending the price down despite what looked like encouraging news.

Quite a few investors will be disappointed but not too surprised looking back at a number of their comments (and even my own brief comment in 1991)

Th

[divinausa1] 07/9/2011 07:19

disappointing rapeseed yields that early harvesting weather really knocked them, turnover up on last year, so heading in the right direction, market will knock them down but its already well in today's price, so i will top up lower for next year...

[theophilus] 07/9/2011 07:12

Landkom International Plc

07 September 2011

7 September 2011

Landkom International PLC

Rapeseed and wheat harvest result

Landkom International PLC (AIM: LKI, "Landkom" or "the Group"), the Ukrainian producer of agricultural commodities, announces the results of its rapeseed and wheat harvests and the commencement of a strategic review.

Highlights

-- 26,225 tonnes of rapeseed harvested, with an average yield per hectare (ha) of 1.75 tonnes (2010: 2.5 tonnes per ha)

-- Gross profit on rapeseed crop expected to be approximately $3.1m (2010: $2.2m)

-- 60,600 tonnes of wheat harvested, with an average yield per ha of 3.3 tonnes (2010: 3.0 tonnes per ha)

-- Gross profit on wheat expected to be approximately $1.4m (2010: loss $0.1m)

-- Other harvest crops, including 10,500 ha of maize, to be harvested in October

-- As a result of lower than expected revenue generated from rapeseed, the Board now does not expect to report a pre-tax profit for the full year ended 31 October 2011

Neil Balfour, Landkom's Chairman said:

"Although the wheat harvest was successful, bringing in 60,600 tonnes at a yield of 3.3 tonnes per ha, the yield on the winter rapeseed crop proved disappointing at only 1.75 tonnes per ha - below the Board's expectations. However, rapeseed revenue was supported by attractively priced contracts. The maize harvest is due to start shortly and harvest of sunflower is under way. We have already planted more than 11,000 ha of winter rapeseed with wheat planting under way.

"The financial implications of a lower than anticipated rapeseed harvest are being assessed. The Board is now reviewing the Group's strategic options."

Rapeseed

The Group has completed the entire rapeseed harvest for 2011. During this harvest season the Group harvested 26,225 tonnes of winter and spring rapeseed, accepted, certified, clean and dried from 14,996 ha. A further 1,165 ha of planted rapeseed was not harvested due to weather damage. These results represent an average yield per ha of 1.75 tonnes from harvested land. Winter rapeseed contributed 1.9 tonnes per ha from 11,712 ha (2010: 2.5 tonnes per ha) and the Group's first ever spring rapeseed harvest contributed 1.4 tonnes per ha from 3,284 ha (2010: nil)

The average yield achieved on the rapeseed harvest is below the Board's expectations due to a combination of earlier hail damage and heavy rains during harvest. Fields under regular cultivation delivered above-average yields compared to fields planted for the first time in the autumn last year.

As previously announced, the Group has contracted to supply 30,000 tonnes of rapeseed to buyers. While these agreements provide for Landkom to vary the amount by up to 5 per cent. on average, there will be a shortfall to cover. The Group does not anticipate any problem with purchasing the amount of rapeseed required to meet its contractual commitments, at a favourable price.

Wheat

The Group has completed its wheat harvest. In total, the Group has harvested 60,600 tonnes of wheat from 18,200 planted ha (all planted hectares were harvested). Of this total 45,640 tonnes of winter wheat was harvested from 13,055 ha and 14,954 tonnes of spring wheat was harvested from 5,137 ha. The yield is 3.5 tonnes per ha for winter wheat (2010: 3.0) and 2.9 for spring wheat (2010: 3.0).

Other crops

The Group's other crops include 10,500 ha of maize, 2,000ha of sunflower, 1,700 ha of soya and 600 ha of mixed crops for forage, all of which will be harvested in late September and into October. The planted maize is a significant increase on 2010 when 8,085 ha were planted.

As previously announced, the Group has successfully completed its harvest of barley in Crimea.

Planting

Autumn planting is now underway and the Group expects to plant in excess of 13,500 ha of winter rapeseed before 10 September 2011 with other crops to follow. In total the Group expects to plant in excess of 30,000 ha in its autumn planting programme.

Financial update

Total revenues from rapeseed are expected to be approximately $15.1m (2010: $12.5m). The lower yield was due to weather conditions and the very high moisture content in the harvested crop which has needed to be dried before shipment. The lower yield has been partially offset by the higher average net price of $575 per tonne (2010: $327 per tonne) obtained through the forward sales contracts. However, despite the higher sales prices, the lower than expected yield on the rapeseed crop has meant that revenues from the sale of rapeseed will be significantly lower than the Board's previous expectations.

The Group expects direct operating costs for winter rapeseed to be approximately $740 per planted ha (ex VAT) (2010: $650) and spring rapeseed $560 (2010: n.a.), giving a gross profit of approximately $2.5m for winter rapeseed (2010: $2.2m), and $0.6m for spring rapeseed (2010: n.a.).

Revenues from wheat are expected to be in the region of $10.4m (2010: $2.2m). After direct costs of $9.0m, Landkom expects to achieve a gross profit on its wheat crop of approximately $1.4m (2010: loss $0.1m).

The Group has sold forward 35,000 tons of its maize crop at an average price of $280 per tonne excluding VAT and expects the net price to be $221 per tonne after commissions, export tariffs and delivery costs. If achieved, this will provide gross revenues of $12.4m.

As a result of the lower than expected revenue generated from rapeseed, the Group now does not expect to report a pre-tax profit for the full year ended 31 October 2011.

The Group has bought chemicals, seeds and fertilizer in advance of its autumn planting programme and will need to manage its cash flow carefully.

Strategic review

The Board has also begun a review of the business to consider a broad range of strategic alternatives.

For further information:

[divinausa1] 06/9/2011 11:44

Wheat harvest results tomorrow...

[loganair] 06/9/2011 10:48

Russia reporting yesterday, due to being unable to transport harvested crops from farms due to lack of rail transport, export wheat will be 5mln tons lower than originally forecast. Like the good old days in the old USSR.

[tim000] 05/9/2011 17:47

I don't think the Edison figures can be taken seriously. First, they imply a profit of just £1 mn, which is largely accounted for by profits in H1 carried forward from last year! In other words, LKI won't make any profit from this year's harvest, despite a 60% increase in acres harvested, a near 40% increase in yield per acre (estimated) and a probable increase in grain prices! And when LKI keep saying they're going to make a profit this year. As you say, quite a discrepancy. I've no idea how Edison come up with such a feeble number, unless they expect an awful lot of forward selling into next year's financial year - which is still profit but won't be recorded until 2011/12. The arithmetic for LKI's P/L account is not complicated.

[3800] 05/9/2011 17:28

Well tim000
the latest brokers forcast on 05-08-11 by Edison Investments gave an EPS for 2011 at 0.24p and you have a figure more than 8 times that! Quite a discrepancy, we will have to see who is the most right.
3800

[tim000] 05/9/2011 16:11

If it's of any use, I plan to give my own estimates, once I see this week's update. I will also split profits between those that will accrue within the financial year and those that will be deferred to next year due to forward sales beyond October. At the moment, I struggle to see how total profits will be less than 2p per share, but the update will make things much clearer.

[hy3nas4] 05/9/2011 13:39

divinausa1

Given that the crops are expected to be good, do you have a guestimate of profits / share price.

[divinausa1] 04/9/2011 10:58

i emailed the company, said results out early next week....

[loganair] 03/9/2011 09:14

Rapeseed is one of LKI's most important crops, much of which has already been forward sold for Bio-fuel.

Over the coming years both the Chinese and Indians' will require more and more imported food stuffs as their middle-class grows. Therefore over the long run LKI is an extremely good investment and worth picking-up more shares on any dip in the price.

Remember fair value for LKI for 2011 is 10p per share if no more than 20% of crop lost and 12p is less than 5% lost and 12p & 15p respectively for 2012.