Company announcement no 12/2022 - Interim Report Q2 2022 and summons to written resolutions

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Interim Report Q2 2022 and summons to written resolutions

EBITDA fixed herd prices (FHP) for Q2 2022 decreased to 5,733 mEUR (Q2 2021: 6,111 kEUR), corresponding to an EBITDA margin FHP of 22.1% (Q2 2021: 21.6%). The quarterly EBITDA decreased by 378 kEUR (compared to Q2 2021), but the relatively small change has several significant effects. On the positive side, subsidy in LT of 2.530 kEUR and improved sales prices in LT of 3.104 kEUR, nevertheless increasing feed prices, lower sales prices in Russia, higher production cost combined with Ostrov site only partly in operation are higher than the positive effects.

Sales prices in Q2 were 1.31 EUR/kg live weight, up from 1,20 EUR/kg (Q2 2021). Better prices have been driven by the price increase in LT, which increased by 0,24 EUR/kg compared to 2021.

Feed prices in Q2 2022 were 282 EUR/T (compared to 238 EUR/T Q2 2021), and the price increased on key feed components and dramatical on some (e.g., premix and proteins). The feed prices reflect that grain prices in LT were fixed.

Grain prices have changed during Q2 from an upwards trend to a downwards. Idavang decided to exit the matif (hedges in LT) over an extended period. Mid-July did Idavang close the last hedge position for the new harvest. Hence the price is now fully variable for Lithuania. End June Idavang had received 6,4 mEUR for the closed matif positions and an additional 0,4 mEUR in July (other receivables with 0,6 mEUR in Q2 report).

Idavang EBITDA (FHP) will the next year be highly impacted by the 8,6 mEUR matif gains already exercised, and included in equity and cash position. Hence, if current production cost is calculated without all matif gains and favorable hedges, then the Lithuanian cash EBITDA production price is estimated to be 1,33-1,35 EUR/kg, without subsidies.

Subsidy for high feed prices received in LT of 2,5 mEUR in Q2, and an additional 2,5 mEUR is expected in Q3.

The herd valuation in Q2 decreased by 2,247 kEUR (compared to 31.03.2022). The decrease is mainly due to reducing prices of 30 kg. 
Free cash flow was 11,059 kEUR in Q2 2021 (Q2 2021: 4,735 kEUR).  Net interest-bearing debt has decreased from 78,5 mEUR (31.12.2021) to 71,9 mEUR driven by the closed matif contracts 6,4 mEUR.

Lack of exchangeability EURRUB
EURRUB for the period April-June has in the report been included with 93,70 equals to FX used on 31/3 in Q1 report.
Current status is that RUB cannot be exchanged to EUR and transfers out of Russia is also not possible.

EURRUB FX exchange made public by the Russian central bank here has limited actual use and ECB stopped publishing FX rates on RUB on 1st Marts 2022 (EURRUB 117,20). Therefore, Idavang expects to apply Exposure Draft from IFRS on Lack of exchangeability if EURRUB does not get normally exchangeable before.

Written resolutions
Please see enclosed summons to written resolutions regarding a proposal for amendments to the bond terms of 5 November 2020.

Further information

Bondholders - Claus Baltsersen, CEO phone +370 (685) 34 104

Media - Jytte Rosenmaj, Board Member phone +45 26 73 46 99