Good morning, dear listeners. Welcome to Akola Group meeting with investors. I'm Emilia from Nasdaq Vilnius, and I'll be moderating for today's event. We will start with a presentation from the management, which will be followed by the Q&A session. Please be informed that this webinar is being recorded. As always, I encourage every one of you to ask questions during or after the presentation in the Q&A section or raise your hand after the presentation and ask a live question. With that said, I'm pleased to introduce today's presenter, Chief Financial Officer of the company, Mažvydas Šileika. Mr. Šileika, please, the floor is yours and good luck.
Good morning, everyone. Thank you for joining me for this investor webinar of Akola Group to go through the overview of activities and full financial year results of 2021-2022, which we just announced recently. Be aware that this presentation has forward-looking statements and management opinions, so be aware of this. As previously, I will start with a snapshot of the group, and the group reached EUR 213 million market capitalization yesterday after announcing the full year results of 2021-2022. We actually hit a very nice milestone as we topped the Baltic Nasdaq Baltic Stock Exchange in terms of revenue.
We estimate that we are the first or the largest company in terms of turnover on the stock exchange. We closed the financial year with around 5,000 employees. We traded 3.7 million tons in sales volume. We own 564,000 storage capacity, and our managed arable land hasn't changed a lot during the financial year, and it stands at 18,000 and roughly 300. We report five key activities and the revenue for the financial year split stands at 62% for Grain, Oilseed and Feed, 20%-20% for Products and Services for Farming.
2% goes to our Agricultural Production and a nice increase in our Food production part, which stands now at 18%. Other activities comprise at 2%. We almost hit EUR 2 billion in terms of revenue for the full financial year, and it stands at around EUR 1.9 billion. We reported EUR 134 million in consolidated EBITDA, EUR 80 million in net profit, and the balance sheet stands at EUR 873 million. We inked very nice return ratios for the full financial year. Our Return on Capital Employed stands at 19%. Capital ratio is around 32%, and the leverage was really under control for the full financial year and is just above 2 times financial debt to EBITDA.
Latest developments in the group, we just announced that we have managed to sell companies in Russia and Belarus. We still remain with one company in Belarus. However, the decisions which were made by the group management has been fulfilled, even though the process was quite complicated, and we still have one more company to sell. In terms of latest developments in terms of group structure, now we manage 69 companies and we don't have any assets anymore in Russia. We still have one company remaining in Belarus, which we are still aiming to sell. However, the financial position of the company is much worse than the ones we sold. It has quite high leverage, and it's not that attractive for acquirers.
One more thing is that we have a minority owner there, so we have to also take into account his interest in the company. To be precise, the group has recorded all-time high revenues as well as profit for the full financial year. Of course, the big shift or change of that is the acquisition and incorporation of AB Kauno Grūdai to the full structure. Of course, for the full year, we were working in a very difficult situation in terms of the war in Ukraine, high price inflation and quite volatile commodity prices. Other than that, we feel that the returns we have delivered are really strong.
The only sector which is really suffering from very high energy prices is, of course, poultry, and that is reflected in our Food segment results. If we would look at the composition of our revenues, which are for the full year at EUR 1.9 billion, majority of that came in the fourth quarter. That's the trend for the last few years, that we still have quite a lot of activity for the fourth quarter, meaning that we still trade and sell and buy quite a lot of commodities. We still have inventories left for the fourth quarter, and this is the trend for the past few years, and that wasn't an exception for this year as well.
29% of the total revenues came in the fourth quarter. The composition of the revenues has changed a bit as well. Since last financial year, now we have a much bigger share of revenues coming from food segment, and it stands at around 18%, compared to 8% last year. This is mainly due to the new businesses acquired with AB Kauno Grūda i. This share has increased while diminishing the share of grain, oilseeds and feed. Now it stands only at 62%, still the biggest revenue generating segment. The segment proportion of Products and Services for Farming and the composition remain more or less the same if compared to last year.
On the bottom of the slide, you can see an indication how much the group has changed with the acquisition and incorporation of AB Kauno Grūdai . Without the acquisition, the group would have reported EUR 1.1 billion in terms of turnover. This is actually a 68% increase in group turnover with the acquisition. The profitability of the group is record high and it is incomparable with any other year. You can see that it started from the gross profit. Gross profit margin stands at 9.5%, and this is nothing we have seen before, or at least the past five years.
Without the acquisition or without the new businesses we acquired, the gross profit would still have been higher, 7.9%. With the new businesses, which are more food production businesses, they are more added value businesses, we managed to push the gross profit margin even further. You can see the composition by segments of the gross profit. The high flyers of the year, of course, are products and services for farmers, and it stands at record high EUR 71 million. The next segment is EUR 69 million for grains, oilseeds and feed. Of course, for agricultural production segment, EUR 15 million, which is also record high for the segment. Really good year for the farming companies.
If we look to operating profit, it also is record high in terms of margins as well as overall levels. We have a 5.6% operating profit margin. Without the acquisition, it would have been 4.8%. You can see either way it is much higher than we have seen previously. Also the same trend goes here that with the new businesses, we managed to push the profitability of the group higher. The composition through the segments is very similar to gross profit composition. The biggest contributors are, of course, Products and Services for Farming, as well as Grain, Oilseed and Feed.
Overview of the balance sheet. The composition of the balance sheet hasn't changed a lot. We still remain pretty much a trading company. We have a lot of current assets, meaning inventory and receivables on our balance sheet. We have quite a nice liquidity position. We had around EUR 350 million of credit lines available to us during trading season of 2021-2022. Going forward into the new season, 2022-2023, we now have around EUR 500 million of available credit lines. We secured more funding from our bank partners due to the very high prices in the market, volatility, and of course, our ambition to grow in the market.
Our long-term debt, including leases is 48% or 43% of the total loan portfolio. For year-end, total debt stood at EUR 296 million. We really tried to cap and to manage the debt for the full financial year to have our covenants in line, as well as good return ratios. The return on capital ratio for the group stands at 32%, and the equity is EUR 282 million. If we look at our leverage level, it's really modest, and for full year it stands at 2.1x EBITDA. If we take the readily marketable inventories and adjust them with our debt position, it's even lower and it stands at 1.9.
Really good results for year-end, even having in mind that we unloaded additional debt to acquire Kronoberg, Sweden.. If we look at our long-term debt level, it's even below 1x EBITDA. For in terms of our working capital composition, you see that it is really skewed toward accounts receivable. The working capital for year-end stands around EUR 354 million, and we had EUR 169 million of short-term debt drawn for the year-end. Looking at the graph, you can see that the equity part, which is actually contributing or participating in working capital financing, has increased slightly from last year. Returns of the group, as I mentioned before, definitely a record high.
Will be really hard to achieve them next years due to, of course, extraordinary high results for this financial year and of course our well-positioned balance sheet. Return on Equity stands at 28.3%, Return on Capital 19.3%, and Return on Assets 9.1%. It's of course times higher than our five-year historical averages. Our Return on Capital Employed for the last five years on average was 6.5% with earned equity 8.7%. So having in mind the uncertainty, the market dynamics and volatility for the upcoming years, upcoming year at least, I consider these results to be really very good even if we compare with our international or regional peers.
Market Capitalization, 183% before the announcement of the results and P/E ratio at 2.5% or 2.5 times, with our new earnings. I will go through our segment activity and briefly comment how they were performing for the last financial year and also give some highlights for the upcoming year or the year which just started. The high flyer segment for the year is of course Products and Services for Farming. The biggest contributor for this financial year. Of course, the segment was working in environment where the prices were increasing steadily all the year.
Inflation and energy prices were pushing fertilizers prices especially, and lack of products in the market or really difficult supply chain position made farmers and our clients to buy inputs as well as agro machinery in advance and plan advance. It's really hard to emphasize any of the positions. Of course, fertilizers and plant protections were the biggest contributors, and they had the biggest increase in terms of revenue as well as of operating profit. However, certified seeds were doing really nicely this year as well. AB Linas Agro. machinery segment or business of ours it was also doing good, even though pressure from the suppliers was and remains really high.
We have quite a lot of challenges looking forward with the supply chains in this segment, especially when the sanctions for Belarus or when the war started and we decided to stop buying and cooperating with entities from Russia and Belarus. This segment in terms of fertilizers especially had to find new suppliers and new products to supply for the local farmers. Agricultural Production segment, record year so far. Crop production really contributed nicely. However, the highest comparable increase is in milk production, and it has two drivers, both increase in terms of efficiency and as well milk quality. The milk quality and the bonuses we received for it were really high for this year. The segment really performed well.
Prices for raw milk remains high as of now, and there is a really healthy demand for that. Looking at the crop production part, the year was really challenging. However, the high prices for main crops, meaning wheat and rapeseed were really high, which of course made the segment record high profitable. Grains, oilseeds and feeds. This segment was mostly battered by the situation in Ukraine. Volatility of prices and demand in this segment during the year was really, really difficult. The year started well for this segment. Even though, you know, with the 6-month results were reported not such a nice result due to the, of course some trading peculiarities as well as our accounting standards.
The segment as forecasted, you know, delivered really strong results. It has a really huge increase in sales, but that was mainly driven by increase in prices and slightly impacted by the amount we traded. This segment also includes compound feed production and feedstock sales. That was also a really strong performance by the segment because soft commodities and feedstock commodities, especially when the war in Ukraine broke down, was really how to say, was really in the middle of activity because everyone in the market or the feed producers, pig producers, poultry producers around the Europe started to buy and secure forward feedstock components to have for their production.
It's really important to mention that this segment was also really affected by the decision to stop cooperating and buying from Russia and Belarus, because we were quite active in trading of feedstock and vegetable oils from Russia and Belarus to Western Europe. Since that decision in late February, just after the war started, we finished the existing contracts, and we are not trading with those geographies anymore. This volatility of prices is still visible in the start of the season because you can imagine that all the events connected with Ukraine, you know, the opening of the ports in Ukraine, also moved the prices quite a bit. It changed the supply and demand as it was before that.
Looking forward, the dynamics and the volatility of this segment for the upcoming financial year really are extreme. However, this segment changed a bit as well with the acquisition of AB Kauno Grūdai . As it gained scale, we gained more elevator capacity, which gives us flexibility in trading of the Baltic grains. As well, the segment now has a more stable part of revenues coming and profits coming from compound feed production. This is very healthy business, which we are now leaders in the Baltics for now. The last segment, which is really significant in our profit and loss accounts, is foods and products.
This segment was, how to say, really in the most extreme conditions, because poultry part of this segment really faced extreme energy prices, especially natural gas prices, which is a big cost component for poultry production. During the second quarter and third quarter, we were hit by really high natural gas prices, and that was really hard to incorporate into our cost structure. We started the exercise to of course increase the final production prices for the supermarkets. However, if it of course takes time, it has a lag to do that. We managed to do that towards the end of the year. Of course, the natural consumption of natural gas in the poultry segment decreases for the warm period of the year.
For the last two months, the tide changed for poultry business, and they became profitable. However, it decreased the negative or the red numbers of the overall segment, but it didn't put the segment into profitability overall. Even though grain-based food products, meaning instant porridges, instant noodles, breadcrumbs, flour, were performing profitably and really well during this year. The profitability they contributed to the segment was not enough to offset the negative results from the poultry business. Looking forward, we see a healthy demand for our grain-based food products, especially instant noodles and instant porridges. We also have allocated some investments for these businesses for the next financial year.
Poultry business, however, remains the biggest challenge for the upcoming year because you can see how the energy prices are moving, and we see that so far natural gas prices are even higher than compared to last year. Electricity prices are also an issue, and this segment will be under high cost inflation for the upcoming year due to of course wage inflation and main energy input inflation. Other activities, this is of course a completely new segment, and it was really not that visible previously. However, now it has a few nice businesses which are new to us, but also they are trying to establish themselves in the market. That's of course pet food production and sales, pest control and hygiene products.
They have contributed to the overall PNL of the group. However, the impact is still not that significant. The main events for the last quarter or the events after the reporting is of course that, as announced in spring, we have finished the KG Crop business division incorporation into AB Linas Agro. Now we have one incorporated and integrated crop business, meaning grain trading as well as input sales. These activities are concentrated in AB Linas Agro. AB Kauno Grūdai has sold this business to AB Linas Agro, and in return received its shares. It now has 20.26% shares of AB Linas Agro.
Reminder of that is with AB Linas Agro Group. In the end of August, we also transferred all the infrastructure part of AB Kauno Grūdai, which was related with crop business. AB Linas Agro bought AB Kauno Grūdai ir Partneriai. Now, in Lithuania, we have finished the integration of crop business. Latvian part is still remaining. We will do that more or less by the end of calendar year. The business of crop business is smaller in Latvia. It will go smoother and faster. As I mentioned before, and as reported, we sold three companies, two in Russia and one in Belarus for EUR 7.5 million.
We still have one company to sell in Belarus. We are aiming to do that. Now, management has anticipated a net loss of EUR 2.8 million out of this transaction, and it has been booked already in our nine-month results. However, that will be revised during our first quarter reporting and full impact will be evaluated with our first quarter results. A glimpse to this season to this financial year 2022-2023. The estimated harvest in Lithuania might total at 7-8 million tons of grain. That's a really strong year average. So far, in terms of tonnage, the harvest looks fine. Rapeseed production could amount at around 1 million tons.
Of course, this year we have a higher concentration of feed grain, and of course, lower quality, lower protein content. That's a bit of a difference between the harvest, meaning last year's harvest. However, maybe there will be more liquidity for this kind of grain going forward. We will see. The market is really dynamic. You know, the oil content in rapeseed looks quite solid so far. The beginning of the year looks fine from the harvest perspective. However, the energy inflation, wage cost inflation and overall expectations of consumers are really changing this autumn. We are facing increase in interest rates as well.
We will see how that will affect market and consumption of people. Overall, the start of the financial year looks fine so far from that perspective. Thank you very much. I will take your questions now.
Thank you very much for the presentation. Before we proceed with the Q&A section, I would like to remind all the attendees that you are welcome to send in your questions in the Q&A box of your screen, or you can raise your hand and wait to be unmuted to ask the question live. Let's begin. The first question would be as follows: What are the expectations for the financial year 2023, 2022/2023? Thank you.
I touched a bit in my ending note, but maybe to reiterate is that the harvest is so far fine. It's really workable in terms of tonnage. It is quite strong. Of course, the quality of grain is a bit different, so we'll see how that will trade during the year. Price volatility for commodities remain quite high, and it might change during the year several times, as it is really moved by a lot of different events all over the world. Overall expectations of the harvest worldwide are also quite strong. That's why you know, one of the reasons why we also have a bit of a dip of prices recently.
That is also of course connected with the events in Ukraine. In terms of input business, we see a wild situation, of course, in the fertilizer segment. You have probably seen recently that quite a lot of factories throughout Europe are closing which are producing fertilizers. There might be a lack of products or the geographies where we will have to buy the product from changes again. The feeling is that our clients will try to secure fertilizers and plant protection products in advance. Farming companies have started the year also on a high note. We still have a good or profitable milk purchase prices. Our results from this harvest also look strong as overall from them from.
As for the overall harvest in the country. Our food segment, of course, is under high energy price pressure. However, we try to manage that through hedging, through diversification of suppliers and inputs. However, looking forward the gas or natural gas prices is really a challenge for the poultry business going forward because, you know the pressure on the prices of the final products on the shelves of supermarkets remains really high from our competitors and from Poland and other areas. We will see how that goes. Of course, this is probably nothing new what you can hear from the overall market conditions.
Thank you very much for your comprehensive answer. Let's proceed with the next question, which would be as follows: How is the integration of the latest acquisition progressing? Thank you.
Yeah. Thank you. With the transfer of crop business from AB Kauno Grūdai, with the infrastructure, meaning with the elevators, we have finished one of the biggest projects, which was going through all of the year. We integrated and we combined crop trading, input trading business and infrastructure connected with that to AB Linas Agro . Now we have one strong, big team, integrated company, integrated sales team, integrated product portfolio. We will finish that in Latvia in the coming, upcoming few months. Apart from that, the crop business will be fully integrated. In terms of poultry business, the integration took place this year as well. We started operating as a one company, quite soon after the integration.
We integrated the management teams, production cycles. We optimized the product portfolio, and that's also pretty much done throughout this year. Looking strategically, from group perspective, we have more or less finished the integration of the AB Kauno Grūdai group, and it's now all the business areas are now operating as planned, as one and only maybe small things are left to do for the next year.
Thank you very much. During the last quarter, debts from clients increased. Is this seasonal effect or there is any risks of receiving part of receivables?
Yeah. This is of course mainly impacted by seasonality. Our debtor portfolio has increased a lot, sorry, as well. It is bigger now than compared to last year. Part of the effect is also that farmers are delivering grain a bit slower. They are keeping the grain because they can do that because they have the infrastructure or the weather was really nice. Without the infrastructure, you still can have, you know, keep the grain at your farm without any special conditions. And of course we are waiting maybe for even more favorable prices. They haven't delivered the grain sooner.
They're waiting till the maybe last moment when they have to do under the contract to get even higher prices for their products, and then they will start covering their debts. Overall, we of course monitor that very closely. We think that the portfolio is as healthy as it was, but maybe due to some seasonality and other circumstances, we have a slower delivery of grain and of course then covering of the debts from the inputs.
Thank you very much. The next question would be, looking at the financial year 2022, 2023 ahead, could you please elaborate on the fertilizer supply?
I touched this topic a bit previously. My main message here would be that the situation is really very dynamic. You know, we've had to shift from suppliers from the East to suppliers from the West. Of course we managed to do that because we supplied our farmers with enough quantities of fertilizers. The portfolio where we buy from really changed. I mean, the geographies range from U.S., Germany, Morocco, and others. However, now especially with the nitrogen fertilizer, as you probably all followed the news, the gas price became really hard to sustain for the factories. Some of them, not of course all, are closing and waiting out the high peak of natural gas. That's also very cyclical.
They will come back into the production as the price will decrease, and the price probably will decrease with the change of demand for that. We have a lot of political events which also influence the gas price. You know, we shifted our portfolio where we can get the fertilizers in again. The situation is very dynamic. We have really experienced team. We follow the situation. We advise the farmers what's the best, of course, way, in our opinion, to trade in these circumstances. As of now we managed to secure enough supply for this period.
We really feel a high demand from the farmer side to secure the fertilizers as soon as possible and not to risk for the spring application.
Thank you for your answer. Considering exceptional year, what's your expected gross profit for the group long-term, assuming no new added value businesses?
It's a very tricky question because several factors influencing that. You have probably noticed that we delivered such high results without a significant impact from our poultry division. Even though we have extraordinary results from our grain trade as well as input trade, we have not added a lot from that part. In my opinion and my expectations are that we won't sustain such a high level of gross profit because as far as you know we can evaluate it was a really extraordinary year. You know the strategy in Ukraine really changed the market overnight. It's changed a lot. I think that not.
I think in the long term, our poultry division will deliver more sustainable results, and that will compensate the extraordinary results we gained from trading and inputs. I don't want to pinpoint a number. I think with the acquisition of AB Kauno Grūdai, it's only a year since we acquired. It's only a year since we integrated. We still see that some of the internal synergies, internal efficiencies will kick in during this year. I think after this year, if you know all the outside events normalize, we'll be at an example of what we can deliver.
Thank you very much. Have you made any changes to your risk management policies in light of the high prices and volatility and requirements for working capital?
We haven't changed our risk policy per se. We still remain pretty much in the open position limits we used to work in. We only adapt them with the prices which are noticeable for the trading season. We monitor the open position really very closely because due to volatility in the market, but we use extensively a lot of hedging mechanisms to manage the risk as much as possible. Last year was, of course, a market where the prices were increasing, so the risk management or hedging was a bit easier. However, this year is a very different story, so we don't know how that will evolve, and that's why we apply a very robust risk management.
Overall, I think we use hedging or risk management not only for our trading businesses, but as well as for our production businesses where energy prices play a big role.
Thank you very much. What are your long-term targets for ROE and ROC?
Thank you. That's a very good question. We think that our Return on Capital Employed as well as Return on Equity have to be above 12%. I think in the long term, our aim is to land somewhere in between 12%-15%, respectively. I hope that will be achievable through our business portfolio, which we have now and, of course, the investments we are putting forward to that.
Thank you. What are your actions to return poultry business into profitability? How about the impact of high energy prices? Any chances this segment will be profitable next financial year?
Three main things, production efficiency, energy efficiency, and of course, pricing, main pillars where we are putting our efforts. Production efficiency is really embattled by the increase of wages. Wages inflation is really high, both in Lithuania and Latvia. Energy efficiency, we are putting extra investments to be more efficient on our gas, heat consumption. We're also putting efforts to have alternatives to natural gas, meaning alternatives to liquefied natural gas. Of course pricing. We are working with our partners, supermarkets, and trying adapt the prices for our products, which of course is also very difficult because of the pressure from our competitors mainly in Poland.
Other thing is that feedstock prices during the last year, which is of course good for trading, good maybe for our agricultural companies, is of course bad for our production companies. Increasing grain prices and feedstock prices is also a big challenge for our poultry business as feedstock prices increase. Maybe it will normalize during this year, so one of the factors really affecting our profitability will diminish.
For the forecast for full financial year, I would be really lucky to have a good estimate what we can bring for the next financial year because, you know, I look to the gas price every week and I hope it might change course or it might change tide to the other side, but it's probably only hope we have. We will see what can happen in winter because winter of course is the critical moment where we consume most of our gases and energy when producing poultry. We are putting a lot of effort either to hedge it, to switch it, or to diversify it. We will see how successful we will be.
Thank you. It seems that we have answered more than half of the questions that we received, so let's proceed. The next question would be as follows: What will be the impact on profit and loss of Russian and Belarus subsidiary sale?
The specific impact will be accounted and calculated during the first quarter of this financial year, as we sold the companies basically in the end of August. We need to close the financial statements to see what was the investment position, so we will see what that will bring. I don't want to speculate yet. For now, we already have booked EUR 2.8 million of possible losses into financial year of 2021, 2022. That was under assumption of the management. I think that will be not more than that. Hopefully, maybe we will even be able to decrease and have a reversal on that, but I would not like to speculate more.
Thank you for your answer. Could you please comment more on the poultry business in light of oversupply in Europe? Is demand side normalizing given increased cost around Europe?
The demand is more or less reestablished after COVID. It is growing again. Poultry as a protein source is still the fastest growing because it's quite sustainable or CO2 neutral. It's really healthy. The overall long-term trends for poultry are still there and we believe that, you know, the choice to enter this business and the arguments to enter this business in 2013 are still the same. However, the pressure from competition, you know, from the Polish competition is still very high. They are the biggest, largest producers of poultry in Europe, and they have the cheapest cost base to do that due to favorable taxation, favorable labor laws, currency position. Their size is incomparable and other stuff.
Basically, we still are embattled by the competitors there. We still are able to compete by you know, being more efficient, trying to be more efficient to produce safer, more higher quality products and of course trying to price them higher in the market.
Thank you very much for your answer. Andre is congratulating you on the great results and is asking could you please provide a bit more flavor on the Products and Services for Farming segment in the next financial year? For instance, is the hoarding to continue or some normalization on-hand? Thank you.
So far it seems to be the situation as we saw last year all over again, because as I mentioned before, the situation with fertilizers is very difficult, you know, and changing every month. We have more issues with supply chains for our AB Linas Agro machinery. We will see how that will affect any possible results. However, the sentiment of the farmers to buy and invest into AB Linas Agro machinery is really good. It's really healthy because the financial position is also good after last harvest and this harvest as well. Overall, we see that we started the year strong. We will see how it will develop during the year.
However, I want to emphasize as well that this segment has expanded a lot with Polovėja acquisition, because some of the segments or business areas like fertilizers and plant protection we acquired significant portfolios. We had a task to keep them and to remain one of the biggest players in the market. That also helps the segment to be more profitable and a bigger contributor to the overall P&L of the group.
Thank you for your answer. Let's proceed. The next question would be, if Ukraine would be able to realize all the grain which is now blocked, how it would affect the European markets and your sales abroad?
Well, Ukraine is a very complicated situation because they opened the ports, but the overall port capacity, of course, is limited. It will depend on this year's harvest, but there are a lot of estimates in the market how much they can export and if that will be sufficient. Polish border, which is also a big trading destination now where we are active as well, it has a lot of issues. It depends if that will be resolved, meaning there are a lot of congestions, it lacks in logistics infrastructure, there are differences in rail tracks and all other things you hear all over the news. To be honest, we take very secure positions on trading via Polish border.
We also take into account what are the possibilities of any possible changes with the Ukraine situation. The one thing was already visible that we have a drop in grain prices when the ports were opened. Now the prices have, you know, stabilized a bit. However, and we'll see where they can go. The effect on our Baltic grain exports are already there. We have more or less the same situation as we used to have with Ukraine, Russia having good harvest. Overall European harvest is fine. We are again more or less in the same competitive situation as we used to be before the war in terms of grains. Feedstuff is a bit different situation.
There is still a very healthy demand for feedstuff, meaning vegetable oil, and sunflower cake, and sunflower extraction, rapeseed extraction. One effect is also visible in the beginning of this financial year, is that a lot of feedstuff producers or mills really try to secure extra inventory, or they did extra purchases in the end of last financial year, meaning they were more active in the market during especially June. Now they have secured their supply for at least probably September. They, of course, are looking what is happening in the market as well. I would say, you know, there is a bit of a standstill in the market now, as a lot of grains are coming from other regions as well.
We will see when how the prices and the demand develops when the feedstuff producers and mills will come back, buying and securing their purchases going forward.
Thank you for your explanation. The next question would be, what would be your long-term ROE target?
I think I touched upon this one previously. Our ROE and Return on Capital Employed targets or we are aiming to have them in the area of 12%-15%.
Thank you. Which segment had the largest exposure to Russia, Belarus in terms of sales and EBIT in 2021 and 2022?
This is mainly the Grain, Oilseed and Feed segment. They were either you know companies in Russia were producing feedstuff additives, and they were selling them locally. Their sales are shown in this segment. Belarusian companies as well, they were either trading inputs, seeds, or producing feedstuff additives. In terms of sales, they were booked in the first segments. It's important to say that you know those sales were mainly or 100% or 98% local, meaning they were produced in Russia and sold in Russia. The same goes for Belarus. Most of the sales and profitability will go out of that segment.
That segment was also the influenced by the thing that we were buying feedstuff and vegetable oil from Russia and Belarus, which we stopped doing that. In terms of sourcing, our sourcing markets have closed. That's also a shift of our business. Now we're sourcing more from other markets, Ukraine, Kazakhstan, and others, searching for alternatives, which we used to buy in Russia and Belarus. In terms of, you know, our sales for other segments, they were much smaller. We had some sales in poultry division. We had some sales in our input division inputs of course also were. Especially seed fertilizers were sourced from Russia and Belarus, and now we're sourcing them from other areas.
More or less the impact is really very limited or we managed to reorientate our business.
Thank you. It seems that we have two more questions remaining. Dear attendees, in case your question wasn't answered yet, please, write it down and send it to us, as we would like to receive it in the time remaining. The next question would be, investors are waiting for a reliable and adequate dividend policy. Will it be offered by board and supported by the majority shareholder in this year's annual shareholders meeting?
This is our aim to deliver a dividend policy for the upcoming years. I truly believe we will manage and succeed in that.
Thank you very much. Having in mind high fertilizer price, what is the group's strategy on using fertilizers for group's own land plots for the next season?
Well, we look at the overall economics of the farms. Even with the high fertilizer prices, we look what are the prices to sell our future crops. Of course, we need to have a favorable margin on that. So far it was okay, or even very good because the grain prices had increased more than the fertilizer prices. We are trying or securing fertilizers even for these prices, because without the application of fertilizers, the harvest will be or would be, you know, 50, 60% lower. Even without having that cost into our structure, but having such a low yields from one hectare would not make the farms profitable.
That goes for the whole country and that's the economics of the farms. We employ different strategies how we acquire fertilizers during the year. We buy different batches, but fertilizer security actually is a big thing which we are aiming maybe first to secure the fertilizers adequately, make sales with high grain prices and you know, hedge our positions naturally a bit on this one.
Thank you very much. We have received one more question. Could you please comment if current market offer further acquisition targets?
As of now, we don't see any large acquisitions. The market is interesting because there are companies which are going for sale, either because they're performing very well under this market conditions or very poor. Our strategy is of course not to go for very expensive targets. We are looking maybe for more of a branded food production business expansion. We are quite, you know, picky on that. Our consolidation in the Baltics is probably more or less over. Maybe only some very specific business areas could be of interest.
Thank you very much. It seems that all the questions are answered. Mr. Šileika, all the attendees, thank you very much for being with us for this morning hour. The recording, as always, will be available in the Nasdaq Baltic YouTube channel and companies announcements. Have a good day everyone and goodbye.
Thank you. Goodbye.