Hello, everyone. Thank you very much for joining this call, during which we will present our 2025 results. We still have quite a few external parties joining the call. We would like everyone to be on mute, and we will have a Q&A session for which we would like you to send questions in the Q&A box, so that we can read it out. Without further ado, we would like to go to our first highlights on the P&L. We had quite a difficult year last year on the harvest front. Practically all crops except sugar beet were lower than in the previous period.
That was reflected in the reduction of our revenues of the agricultural segment and also, lower acreage for sugar production also resulted in lower revenues for sugar, along with the price decreases. We had a good growth in soybean processing and the cattle farming, the two segments which remained robust on the revenue line. In terms of profitability, we had EBITDA margin contraction from 26% to 21%. We do provide the picture without biological asset remeasurement in the lower part of the slide. The margin contraction was less dramatic here, but also down to 23%.
On the cash flow situation, operating cash flows were down by three quarters, but if we exclude the impact of the working capital, the fall was not as dramatic. It was down to over EUR 100 million. Investing cash flows doubled in 2025 as we continue to invest in our main project, Soy Protein Concentrate facility, which we are planning to launch in the second half of this year. We also started our works on the multi-seed crusher, although the timetable for this project has been moved. We also continued our maintenance CapEx in other segments. These investments led to increase in our leverage, which, as of year-end, was over 2 times net debt to EBITDA.
Agriculture, along with some lower crop prices, we had lower volumes of sales by 1/3. That was the main reason for contraction in revenues and EBITDA. If we are looking at the harvest of last year, corn was flat, all other grain and oilseeds were down. Sugar beet was a higher yield, which resulted in the same amount of sugar produced despite the lower acreage of 34,000 hectares. Looking ahead into the current year, our crop rotation mix is almost stable. For the key strategic crops like sugar beet, there is a slight decrease. It stays flat for soybeans. We have a slight increase of corn and expense of wheat for this year.
If we are looking at the global market situation, there was a convergence between domestic and international prices. We had a big change in the trading regime with the EU, which affected us not only for the sugar segment, where quotas were imposed at 100,000 tonnes, which is only 1/5 of Ukraine exports in the previous years to the EU. Grain quotas were also reinstated at pre-war levels for the key grains. Therefore, the exports to this market was reduced, and Ukrainian producers, including Astarta, increased their presence in South Europe and North Africa region, Middle East as well.
Continuing on the sugar topic, there was reduction in acreage, because reduced quotas for the European market meant that there is a bigger oversupply in the domestic market. That was coupled with downturn in prices in the global markets, that resulted in lower profitability for us, which continues in the beginning of this year. The selling price over 12 months was down by more than 15%, if we are looking at market prices for the beginning of this year, this downturn unfortunately continued. As we mentioned, the much reduced quota for Ukrainian sugar in European markets led to reduced acreage last year under sugar beet. This year, our expectations are also for sugar beet acreage to reduce by at least 20%.
From almost 200,000 hectares in 2025, we expect it to go down to 160, 165 thousand hectares. That should help relieve pressure on the domestic market. Soybean processing is our stable segment in terms of market access to the EU, in terms of the volumes for our two core products, meal and soybean oil. However, there is a normalization of the crushing margin. We saw elevated margin for the 3 years from 2022 to 2024. Now we can see crushing margin and the EBITDA margin coming back to the pre-war levels, which can be seen in the 5 years preceding 2022.
In order to increase profitability for this segment, we initiated a project to produce Soybean Concentrate. We plan to launch it this year and to have a positive impact on our margins from next year. Last but not the least, we also initiated a new multi-seed crusher construction in Western Ukraine. We would like to focus on launching the SPC facility before significant CapEx outlays for the multi-seed crusher, which we communicated in our annual report. Cattle farming, we had good operating results in terms of the volume and revenue growth, in terms of productivity for this segment. However, there was a cliff edge fall in the milk price, and this led to a big loss on the biological revaluation side of EUR 13 million.
In terms of our strategy, it remains intact during the war times. We are focusing on the oil seed side by launching the new facility, by implementing design works for the next multi-seed facility. This will remain our core strategic focus for this year and next year. With this, we would like to conclude the main part of our presentation. We would welcome your questions in the Q&A area. Quite a few of them already. The first question is from Carl. What was the reason that book value of pieces of cows decreased from 70 UAH in 2024 to 52 UAH in 2025 when prices milk look like not change much? One second. Let me have another look. The book value of pieces of cows.
If we're talking about biological revaluation of cow heads, it is related mostly to the milk prices this year. I would like to pass the floor to our finance director, who will provide more color to this topic.
Yes. Thank you, Julia. It is the influence of revaluation according to our forecast on milk prices, and the effect is EUR 13 million. It is cost only by our expectations of milk price for next 12 months.
Thank you. The next question from Carl. Has company observed any late damage to crops due to cold weather in the last few weeks, especially in rapeseed? Yes, there were reports in Ukraine regarding damage to rapeseed, but in our case, there is the areas which were damaged are not material to be mentioned here. We are on track for our planting season and we are in the final stages of it. Next question from Martin. Any confirmation from the market that sugar beet area locally would be cut by 20% as commented? Yes, there are conflicting messages as usual.
There is data which was provided by the Ministry of Economy of Ukraine, which shows acreage still at the level of closer to 200,000 hectares. However, we have a more reliable data which we believe is coming from Ukrtsukor, and this is not just related to the current year. We saw them as more precisely reporting and estimating acreage under sugar beet in the previous seasons. Until there is a final number also made public, we trust Ukrtsukor as more specialized in our industry, more on the estimates. Next question. What exact factors in the company's opinion drove week first quarter, 2026 sugar price? I would like to pass the floor to our Commercial Director, Viacheslav Chuk.
Yeah, good afternoon to everybody. The main factor was the oversupply on the markets, both Ukrainian and European, because you can see even from the London sugar, white sugar benchmark, so that with lower acreage, everybody received better yields and better sugar content. Even in Ukraine, with 20% of decrease on the landbank area under sugar beet, we still had the same amount of 1.7 million tons of sugar. This general oversupply caused to sharp decrease starting from October, in the first quarter to decrease the sugar prices. Thank you.
Next question. How much surplus stocks of sugar there are right now on domestic market, and what is the projected ending stock for end of September?
We still cannot predict the ending stock as of September, because we see that rebalancing of the markets due to Middle East conflict is appearing. As of now, we can consider that ending stocks could be, and actually the stock which is considered as surplus could be around 300, 250, 300 thousand tons.
Next question. Do you expect to report positive EBITDA in the sugar segment in 2026? I would pass the floor to Liliia Lymanska, our Commercial Director. Oh, sorry, Chief Financial Officer.
We expect that the EBITDA of the sugar segment to be approximately 0. More likely it will be positive.
Next question from Carl. Are company plan to postpone selling rest of sugar in warehouse to time where higher prices potentially may be higher?
Carl, thank you much for your question. Of course, the strategy will depend on the price development and cash flow requirements. We would be considering this after season, when we see the final acreage of sugar beet in Europe, in Ukraine, and actually the news regarding the rebalancing of the markets. Thank you.
Next question. What caused weak soybean EBITDA attributed for the fourth quarter 2025? I'm passing the floor to our Finance Director.
It was caused by combination of factors, including the short-term decrease in crushing margin, together with increasing of production costs. Simultaneously, it was caused by other expenses due to some accrued losses.
It should be noted that last winter in Ukraine was very difficult. People probably aware of severe energy shortages, and we have backup energy facilities at our production assets. Obviously these backup facilities which are operating on diesel rather than taking electricity from the grid, comes at a higher price. Therefore, energy blackouts in Ukraine during winter times led to the cost inflation on the energy side. Next question. Regarding covenants, do you expect to have some issues with them across 2026? This question is also addressed to Ms. Lymanska.
Yes. We reported that we expect some divisions from established covenants, and those banks who have covenants which will be breached, was already informed by us, and we started proper negotiations.
Yes, we expect to obtain all appropriate waivers. Next question. Could you please provide more details about potential acquisition of farming assets mentioned in the current report? Yes. I think, given the historical performance of the company, I think people wouldn't should not expect any major acquisition of land lease assets. In terms of major, we mean within 5% of the current land bank. We always optimize our land assets, focusing on more productive and diversion less productive, but this is within 5% churn. What was put in the current report is in accordance with our public obligations, because we applied to the anti-monopoly approvals, with regards to one particular area, we consider for acquisition.
Again, this is not, this is not, above, several percentage points of the total land bank area. Last time company announced to take over to where this process and how it will increase land size. That's exactly what I was referring to in the previous, in the previous question. We applied for anti-monopoly approval to acquire these 2 legal entities, but the acreage under operations is not more than 5% of our total land area, and we are still in negotiation stage. Next 2 questions from Raimonda. How active are you in the market for farmland? Second, do you observe any M&A activity in the agricultural sector? Yes, there are quite a few sizable transactions in the agricultural sector. One of them was Agro-Region.
I think it was one of the major M&A deals in the Ukrainian agriculture last year. In terms of our activity, our land bank is more or less stable. We are focusing just on areas which are adjacent directly to our operating processing assets, and if we have a good opportunity, we would negotiate land leases or acquisitions of corporate rights with land leases attached to it. Overall, our size, over 200,000 hectares, is sufficient for our core strategic areas, which is sugar beet, and the land bank is directly related to the 5 year crop rotation requirements, and soybeans, which is another crop we are currently processing at own facilities. More or less stable over 200,000 hectares. Next question.
Any chances you may share some material related with progress of building new plant crusher and soy processing during today's call or other one via company page? On this, on the further processing of meal into the soybean concentrate, this is a project we have been investing for the last several years. It is coming to fruition this year, and we will launch production, and hopefully we will have publicity when we launch this production in the second half of this year. In terms of the margin uplift, we expect to see noticeable effect beginning of next year, because people should appreciate it takes time to scale up production and product to get the product quality to the required specification.
In terms of the new multi-seed crusher, it is our strategic goal to expand crushing for soybeans, but also we are one of the major growers of rapeseed, and we lacked capacities to crush those as well. This is our next project that I would like to focus after Soybean Concentrate. It will be located in another region. We would like to focus on launching the current concentrate facility before we give more details on the next project. Overall, we see the second facility to be actively developed over 2027 and 2028. Next question. During one of the recent conferences, you mentioned plans to introduce incentive program and issuance of up to 5% share capital in the form of shares. What is the current status?
Is this topic still under ground consideration? Yes, we are moving towards the management incentive program. We already established an employee benefit trust. The first step in this program is transfer of the treasury shares currently on the balance sheet into the trust for the benefit of top management. The next step we will consider is additional share issue. Again, we already have plenty of shares on our balance sheet which can be utilized to kickstart this program. The trust is established, and we are currently in the technical phase of transferring treasury shares into it. Is there any consideration management board to increase yearly dividend amount that is paid by 10%?
I think this is not a very timely question because we are operating under wartime conditions. We are one of very few players which continue to invest and building new processing assets. Also the nature of agriculture means a volatile business cycle and pricing cycle. Our dividend situation is reviewed on an annual basis, and such considerations should be viewed within the current operating context. I think since the war in Ukraine entered its fifth year, people probably think that there is some normalization, but I can assure you there is nothing normal to operate in wartime conditions. Let's consider this issue a bit later. Do you consider announcing a dividend policy in the near future?
Not in the near future because you appreciate that we are in difficult conditions of the war, so that's not on the agenda for the near future. Our focus is on cash flows and on the investments. Are you considering to increase own energy power supply, solar, wind power? Will this topic be discussed already by the board? We do have own energy production. To start with, the nature of sugar making means that these assets operate 2 to 3 months per year, and we produce electricity and steam required for sugar making in-house, so each of our sugar plants is a big energy producer, producing energy from coal and from natural gas. In addition to natural gas, we have our own in-house biogas facility, which produces around 10 to 15 million cubic meters of biogas.
We also burn plant pellets in our boilers, in addition to coal. Our goal before the war was always to increase share of renewable energy in the energy mix, but that proves very difficult during the war times. After we launch the new facility for Soybean Concentrate, we hope to have more byproducts, which can potentially increase production of biogas, and that will allow us to have more in-house energy production. With regards to renewable energy from solar and wind, this is not our core area of expertise. At our dairy farming operations, we do have small solar energy projects. This is part of our sustainability drive, but this is not to say that we want to become an independent energy producer or our core area of expertise.
Next question. Could you update us on the SPC project? How much CapEx is still required, and when do you expect commissioning? Third quarter, fourth quarter, first meaningful contribution to the results. I will reiterate regarding the meaningful contribution. Production will start in the second half of this year, but it will take time to ramp up production and to receive product quality required of the accordance with the volumes we contracted our product already. On the CapEx side, I would like to pass the floor to our finance director, we started CapEx into SPC facility two years ago. 2024, that was around $17 million. Last year in 2025 and 2026, I will ask Lilia to comment.
Yes. In 2025, we spent EUR 28 million and this year we expect to spend EUR 18 million.
Next question is related to the multi-seed crusher. How much was spent already on the multi-seed crusher, and how much was contractually committed? We, on the multi-seed crusher, we are at the design and architecture stage. It also takes longer than usual in current conditions in Ukraine. We expect the timeline for CapEx to be no shorter than for the SPC over several years, but we are only at the beginning of our process. Design stage is not usually very CapEx intensive. Could you comment on first quarter cash flow and working capital development after the pressure seen in 2025, particularly whether inventory levels, cash conversion, liquidity headroom improved versus year-end?
We are 2 and a half weeks away from our financial results reporting on the 21st of May. We would like to ask you for your patience. We will report financial data then. On the operating data with regards to our volumes and prices, that has already been published in the trade update, so bear with us for the next couple weeks. Given the potential remaining SPC spend, the planned multi-seed crusher CapEx increase in net debt in 2025, what level of total CapEx do you expect in 2026? It's a short answer. We will spend half of less than half of CapEx in 2026 compared to 2025, bearing in mind the market downturn for our key products, especially sugar.
Next question regarding the logistics, whether it was worse in 2025 than in 2024. Passing the floor to Viacheslav Chuk.
Yeah. Thank you very much, Julia. I would say that logistic into 2025 was rather disrupted in the fourth quarter of the year. It was caused by both damages made by war and also having the crop delay with exporting because farmers were expecting for better prices and not exporting, when the volumes were coincided with logistic disruptions. Thank you
That's probably next question also related to this logistic disruptions. Have there been significant operational disruptions due to the ongoing war in 2025? We mentioned logistics. Are there any new expected war-related challenges in 2026? I think it is worth noting that war-related challenges in 2026 may be related not just to Ukraine, but what is happening now in Iran because Ukrainian agriculture is directly affected by the higher cost of energy, especially diesel, and also by the higher cost of fertilizers. Here we would like to underline that as a large scale agricultural producer, we procure large volumes and we create our stocks required for planting well in advance, at least 6 months in advance, so we are in better conditions.
Overall, the war conditions are not just in Ukraine, but affect Ukrainian agriculture globally. I think we addressed all the questions sent to us in the box. If there are any additional inquiries, we invite you to get in touch with us via email and yes, we look forward talking to you again in a very short period of time on the 21st of May. Thank you and have a good afternoon.