Investment summary

The management team has made significant improvements to the business in both agronomic and financial controls. The combination of sharp increases in crop prices and greatly reduced costs meant Landkom was poised to move into profitability in 2011. However, as the company makes this transition, earnings are particularly sensitive to cost and income parameters. So, recent news on the rapeseed harvest indicated greater losses and lower yields than expected, which will now delay the timing of profit arrival. Winter planting of 30k hectares is now only modestly ahead of last year, but this was to be expected given constraints of the revised yields in 2011. We await more details before we adjust our estimates downward.

Last updated on 09/12/2011

Industry outlook

The rich arable land in Ukraine combined with low local costs offer the opportunity to produce crops to satisfy the expanding demands of the world's food and bio-fuel industries.

Last updated on 09/12/2011