Landkom Share Discussion Threads

[loganair] 24/5/2012 15:57

UK, 24th May 2012, by Agrimoney - Alpcot land sales to see slow progress for now.

Alpcot Agro has set-up a team to oversee the disposal of Ukrainian land following the takeover of Landkom International, but is not expecting any imminent deals as it prepares land for sale.

Alpcot is working through the list of potential land for sale "to ensure it is properly structured with the proper legal entity", Stephen Pickup, the group's finance director, said.

This meant the group was "not likely" to see any deals in the "next month or two", although "progress" was likely by the end of the year.

"It is easy to talk about doing a deal. But agreeing a deal where someone hand over money, you get a lot of false starts," Mr Pickup told Agrimoney.com.

'More reliable weather'

The group - which owns 96,600 hectares in Ukraine, mostly gained with Landkom - is considering the sale of land in central areas, such as in Zhytomyr obslast where, according to Landkom, "rainfall is less than western Ukraine, but soil quality is excellent".

Alpcot is to focus its Ukrainian operations on western areas, where it said on Thursday "more reliable weather, especially rainfall, aids the production of the group's key crops".

Disposals in the centre would "provide cash proceeds to the group and permit more efficient logistics for farming operations", said the group, whose sale plans come amid a legal shake-up which may make it easier for foreigners to acquire agricultural land.

'Water deficit'

The comments follow a difficult period for farmers in many parts of Ukraine, hit by dryness during the autumn sowing period, winter cold without protective snow cover, and then dryness in the spring too.

The country's wheat crop, which is nearly all autumn sown, is expected to near-halve to 12m tonnes this year, farm officials the state weather centre said on Monday.

Agritel on Thursday highlighted a continued "water deficit" in the south and east of Ukraine, but flagged rain central, western and northern areas.

Crop losses

Alpcot Agro itself lost some 4,000 hectares of Ukraine crops to winterkill - a factor in a downgrade on Thursday to 54,400 hectares in its estimate for harvested area this year, from a March forecast of 60,000-70,000 hectares.

The group also revealed that soybeans and sunflowers would play a smaller role in sowing schemes than in Landkom's regime, with Alpcot expecting to "focus crop production on rapeseed and wheat for winter crops, and corn as the main spring crop".

[loganair] 24/5/2012 15:55

Stockholm, 24 May 2012 - Landkom acquisition update

Alpcot Agro AB (OMX: ALPA, "Alpcot Agro", or the "Group") completed the acquisition of Landkom International plc ("Landkom") on 27 January 2012. Since then Alpcot Agro has focussed on rapidly integrating the Landkom business into the Group in order to start to deliver the scale and associated benefits for the Ukrainian operation and to create a more balanced Group structure. The following is a general update of the most important aspects of the acquisition.

Integration

Work is ongoing to combine the businesses at an operational level. These include the replacement of many senior Landkom staff. The Group is also carrying out an in depth review of transactions carried out by the previous management in Landkom prior to the acquisition.

Financing

To date approximately $5.7 million have been released to Landkom's principal creditor. Negotiations are ongoing, and full payment of all valid debts will be made once a comprehensive settlement is made between the two parties.

The Group has signed a credit agreement with Raiffeisen Aval Bank to deliver an enlarged facility of up to $15 million to cover the Ukraine business' working capital requirements. This facility has not yet been drawn down.

Besides the credit facility, the Group's only debt in Ukraine consists of approximately $6 million of long term lease financing for machinery and equipment.

Cost savings

Since completion, the Group has made over $1.5m of annualised cost savings focussed on the overseas head office and local headcount. The Landkom office in London has been closed, over 130 staff have been made redundant and additional cost reductions are being planned in Ukraine during the year. The aim is to bring the combined Ukrainian business cost structure in line with industry peers and the Group's legacy Ukrainian business.

Long term savings are likely to be centred on the improved land bank structure and resulting operating cost savings. The Group currently has approximately 96,600 ha in Ukraine. In order to deliver farming efficiency, the Group is considering plans to reduce this land bank through the divestment of non-core land, land that is either non-contiguous or in an area for which the Group does not plan a long term future. Such a strategy, if fully executed, would deliver cost benefits, provide cash proceeds to the Group and permit more efficient logistics for farming operations.

Crop production in 2012

As announced in April, the Group has a total of 35,400 ha of winter crops under cultivation in Ukraine following some winter losses, consisting of 18,400 ha of rapeseed, 14,100 ha of winter and 2,900 ha of barley.

Within Ukraine, the Group expects to plant about 19,000 ha of spring crops, predominantly in the western regions. The planting of 10,800 ha of corn and 4,100 ha of sunflower have been completed. The planting of buckwheat and soya is in progress and should be completed by the first week of June.

This will bring total cultivation for harvest in Ukraine to about 54,400 ha. Harvesting will commence in late June/early July.

Crop production strategy

In the future, Alpcot Agro will focus its Ukrainian operations on the western regions where more reliable weather, especially rainfall, aids the production of the Group's key crops. Within the long term crop rotation plan, the Group expects to focus crop production on rapeseed and wheat for winter crops and corn as the main spring crop, with smaller amounts of sunflower and soya.

Sales

All material levels of inventory have been sold from the 2011 harvest, leaving silo facilities ready to accept new crops. The Group intends to follow Landkom practice of exporting material quantities of crop especially rapeseed and corn. The Group also intends to enter into significant levels of forward sales in order to minimise risk in the sales process during harvest.

Storage capacity

After the combination the Group has 55,000 tonnes of storage capacity in modern silo facilities in western Ukraine, in Lviv and Ivano Frankivsk oblasts, that will be used for the 2012 harvest. In addition the Group has plans for an additional up to 35,000 tonnes of temporary storage and silo facilities. It is planned that between 70-75 per cent of total agricultural production will be processed through Group owned facilities providing considerable cost savings compared to the 2011 harvest.

[loganair] 10/5/2012 14:38

Alpcot Agro ("the Company") has started the spring campaign in both Russia and Ukraine. The status of the winter crops is good and the extent of winter kill has been assessed. The Company is planning to spring plant approximately 58,400 hectares of crops for sale, for a total cropped area of about 126,100 hectares in 2012.

Status of winter crops

Following the acquisition of Landkom in January, the Company has approximately 67,700 hectares planted with winter crops.

Winter planted crops remaining after winter kill, hectares.

Crop.........Russia Ukraine Total
Winter wheat 30,800 14,100 44,900
Winter rape...1,500 18,400 19,900
Winter barley...0.....2,900 2,900
Total....... 32,300 35,400 67,700

In Russia, the state of the winter planted crops is overall good. Due to the thick snow cover, the Company experienced only marginal winter kill in the Russian mainland. In Kaliningrad, the Company lost approximately 1,300 hectares of winter wheat and 600 hectares of winter rape due to winter kill. Most of the fields lost will be reseeded with spring rape, spring wheat and barley. These plantings are included in the figures for spring planting below.

In Ukraine, the Company experienced some winter kill, with approximately 1,800 hectares of winter wheat, 1,400 hectares of winter barley and 800 hectares of winter rape lost in different regions. The remaining crops are in very good shape. The fields with crops that are damaged from the winter will be put into fall planting because chemical residues make them better suited for winter crops.

Updated plan for spring planting

The spring campaign has started across the Company's operations, including both seeding and the application of fertilizer and crop protection chemicals to winter planted crops.

For the 2012 harvest, the Company is planning to spring plant approximately 58,400 hectares of crops for sale, whereof 41,800 in Russia and 16,600 in Ukraine. The most important crops are sunflower, with 16,100 hectares planned, corn, with 12,800 hectares planned, barley, 8,000 hectares planned, soybean, 6,100 hectares planned and spring rape, 5,700 hectares planned. Other crops will cover the remaining 9,700 hectares. In addition, the Company plans to crop approximately 4,600 hectares of fodder crops in Russia for the livestock business. Note that this plan is preliminary and may still be subject to change depending on, among other things, weather conditions over the planting period.

[loganair] 30/4/2012 10:34

I notice that Soya beans are back up to all time record highs, bodes well for Alpcot.

[5huggy] 12/4/2012 14:59

Logan you hangin on to Alpcot shares? i am - i still think they will come good -

The Swedish are not daft - it may take some time to restructure and realise the synergies both fiscally and asset wise

I was a little dissapointed to see the "listing" put back - but my belief is that its in their best interests too! limited market on OMX - more exposure will be required

[loganair] 12/4/2012 14:33

The Board has earlier announced its intention to seek a listing of Alpcot Agros' shares on the London Stock Exchange main market in the second half of 2012. The Board has concluded that the issue to seek such a listing will be raised in 2013.

[jhan66] 30/3/2012 08:59

(no dividend)

[jhan66] 27/3/2012 12:37

I see Alpcot are due to report at the end of March

[loganair] 27/3/2012 10:42

Alpcot Agro Yields from the Ukraine in 2011:

Rape - 2.7t/ha
Winter wheat - 4.5t/ha

imo - it was the Rape yields and the forward selling of 30,000 tons of Rape which couldn't be fullfilled so LKI had to buy in on the spot market to fullfil these contracts that finaly did for them.

[kimboy2] 27/3/2012 10:32

Interesting results from CFGP today.

CFGP yields in Ukraine in 2011
Rape - 2.8t/ha
Winter wheat - 6.8t/ha

LKI yields in Ukraine in 2011
Rape - 1.75t/ha
Winter wheat - 3.3t/ha

I will leave you to draw your own conclusions.

[5huggy] 13/2/2012 22:20

LOGANAIR - I SEE more upside towards summer if FTSE float is a go!!

[loganair] 09/2/2012 15:10

Alpcot Agro CDI's are now showing in my portfolio at £1 per CDI or around 4.4p in old LKI money.

So far so good as my Buy's at 2.75p and 2.68p, a few days before the take-over are at the moment looking like excellent value.

[loganair] 07/2/2012 12:01

The major factor driving the wheat trade higher this week is half the world away from the wheat pits in Chicago and Kansas City.

Arctic air is slamming much of the wheat-growing areas of Ukraine and central Russia, and the spots where there's not quite enough snow cover to insulate the region's winter wheat and barley are starting to suffer from winterkill, says MDA EarthSat Weather senior ag meteorologist Don Keeney.

"Snow cover is sufficient in many areas to insulate and protect the crops from damage," he says. "However, snow cover is a bit thin in far southeastern Ukraine and southern Russia, and we estimate about 15% of the winter wheat and 20% of the winter barley will suffer from winterkill damage."

Ordinarily, winterkill isn't as much of a problem in that region, Keeney says. But, a dry fall there led to poor germination and crop establishment, which could amplify the harmful effects of the current Arctic blast. And that makes replanting likely once winter breaks this spring.

"A very dry fall in much of Ukraine and western Russia prevented germination and proper establishment on 30-40% of the planted acreage," says Keeney.

...........................................................................

Hopefully this means that much of the crop in Western Ukraine isn't too badly damaged, however Alpcot has half it's land in South Western Russia boardering on Ukraine.

[loganair] 07/2/2012 11:53

Ukraine will need to replant 40 percent of winter grain in spring because of damage caused by adverse weather, said Tetiana Adamenko, head of the national weather center's agro-meteorology department.

"We are concerned that there are no forecasts of a significant solid snow pack," Adamenko said. There will be snow in western and northern parts of the country, Adamenko said.

"Plants in the southern and eastern Ukraine are in the area of particular risk because the snow cover there is less than 5 cm

Some 70 percent of winter grain plants isn't fit to survive such cold temperatures for more than three days without snow, according to the meteorologist.

[loganair] 07/2/2012 11:46

A report from mid-October 2011

Ukraine's winter-wheat harvest next year may be 3 million to 4 million metric tons lower than estimated after dry weather in September delayed sowing, according to the national Hydrometeorology Center.

An "incomplete harvest is ensured," Tetiana Adamenko, head of the agro-meteorology department at the weather center, said. Dryness caused farmers to leave about 1.5 million hectares (3.7 million acres) bare, she said. Around 18 percent of winter wheat was sown after the optimal period and 20 percent was never planted.

As much as half of the grain sown for winter will be at risk and dependent on weather, according to Adamenko. Farmers may seed barley next spring in fields where crops were lost because of weather, she said.

[reyemrenburg] 07/2/2012 10:46

More bad farming news from the East, I am afraid! Russia and especially Ukraine are in the grip of severe frost, up to 20 and 30 C and more, without sufficient snow cover to protect the present winter wheat crop. Due to the mild winter up to now, the wheat crop has developed more rapidly then desired and is now subjected to unusual frost unprotected, which it is unable to withstand without being damaged considerably. Provisional estimates are, that the next winter wheat harvest will be reduced by 30 to 50 percent, due to this weather influence !

[loganair] 05/2/2012 11:06

It is confirmed that anyone holding LKI shares will be receiving Alpcot Agro CDI's held on the London Stock Exchange (on the basis of 1 Alpcot Share for every 22.16 LKI shares). They expect this to be effective from some time next week.


What are Crest Depository Interests (CDIs)?

CDIs are UK securities representing an underlying interest in an overseas security. They are issued on a one-for-one basis. Because CDIs are UK securities, you can receive dividends in sterling and can buy or sell CDIs easily in the UK.

You should note however that if underlying investments are quoted in other currencies, exchange rate movements may affect the value of your investment in pounds sterling.

[loganair] 17/1/2012 07:49

Alpcot 2011 Ukraine Harvest Results:

Ukraine
Crop Harvested area ha...Harvest ton..Yield ton/ha
Corn...........3,300......30,900..........9.4 (LKI 6.3) = 49% higher
Winter Wheat...5,500......24,900..........4.5 (LKI 3.5) = 28% higher
Soya...........2,500.......4,200..........1.7 (LKI 1.2) = 41% higher
Winter Rape......900.......2,400..........2.7 (LKI 1.9) = 42% higher
Buckwheat......1,500.......1,800..........1.2
Total Ukraine.13,700......64,200..........4.7

As can been seen from the above Alpcot had a significantly higher yield then LKI for the same crop. LKI did not plant any Buckwheat so there is no equivalent.

If LKI had come any where near the harvest yields of Alpcot, especially for the Rape Seed then they wouldn't have run out of cash with their share price being more like in the region of 10p to 12p.

LKI forward sold 30,000 tons of Rape but only harvested 26,225 tons and therfore had to buy in a significant about of Rape to cover the forward sales agreements. With a similar yield to Alpcot, LKI would have harvested in the region of 37,300 tons.

[farmer20] 16/1/2012 19:53

@Hightech: there seems little point in rejecting the offer. They say they are effectively out of cash without the $20 million cash injection through the acquisition - so you/we might well get nothing and Amaco will get it all. As it stands if you sell post merger at least you will get 30% more than the current price. Also the big institutions have all signed up to the deal so they will get enough votes anyway to push it through... Just my views and as ever DYOR

[hightech] 13/1/2012 09:40

Should we accept or reject the offer? We hold 600k!!!

[loganair] 09/1/2012 13:07

Alpcot current share price 7.95SEK, up 27% since announcing take-over of LKI.

ALPA @ 7.625SEK = LKI @ 3.22p

[loganair] 06/1/2012 05:03

I wonder if this take-over by Alpcot is showing how difficult it is to lease good land in the Ukraine. In otherwords the only way to expand is by take-over rather than leasing land for oneself.

Alpcot are also going to terminate Landkoms Central Ukraine operations (6,100ha harvested 12,300 controlled.)

[hightech] 05/1/2012 23:23

Oil price is rising.

[loganair] 05/1/2012 12:22

I'm for one am going to stick with the take-over. For any who are worried about the liquidity of Alpcot stock.....

"Intention to list merged entity on the Main Market of the London Stock Exchange in H2 2012."

I also like the idea how Alpcot actually own 82,600h of land in Russia with a further 19,400 in the process of being owned.

Also interesting is how Alpcots' yields were on average 20% higher in the Ukraine than Landkom, approximate to those of Continental Farmers Group.

Looking at another difference Alpcot have 137ha harvested per employee while Landkom have only 53 which means Landkom are not operating very efficiently and productively.

Dept of combined group will be $5.7mln.

I also like the idea of how costs within the Ukraine operation will be cut by in the region of $5mln per year by integrating LKI and Alpcot. This will come mainly from the need to have only one office in the Ukraine with one legal team and the reduction in staff of the combined group.