Strong results for Agricover in 2023 and over 10,000 farmers in the portfolio

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Bucharest, March 29, 2024 - Agricover Group, leader in the agribusiness market in Romania, recorded at the end of 2023, a gross value of 2.91 billion lei loans and advances granted to customers in balance and 1.85 billion lei revenues from the sale of agricultural inputs (certified seeds, crop protection products, crop nutrition products and fuels).

10,475 farmers unique customers on 31 December 2023
2.91 billion lei gross value of loans and advances granted to Agricover Credit IFN customers at the end of 2023, up by 2.35% compared to the previous year
1.85 billion lei total revenue for Agricover Distribution SA
44.19 million lei consolidated net profit at Group level
0.024 lei consolidated earnings per share in 2023
2.3 million lei investment in development programmes for farmers and young farmers

In 2023, Agricover surpassed the threshold of 10,000 customers served by the Group, at the end of December their number was 5.3% higher than in December 2022.

The Group continued to invest in its specialist technology company, launching at the end of the year a new version of its own application, CROP360, dedicated to digital farm management, and began distributing and marketing tech solutions for precision agriculture to support the accelerated transformations needed in farm management at all levels.

"We managed to achieve solid results in a complicated year. 2023 was one of the most challenging years in recent history and was dominated by uncertainties. Farmers faced declining productivity due to drought, rising costs to establish crops and falling sales prices. Our strategy, focused on farmers' needs, consisted in adapting financial solutions to the new market conditions and to ensure the accessibility of inputs needed for the agricultural cycle" - said Liviu Dobre, CEO of Agricover Holding.

Agricover Credit IFN recorded gross outstanding loans and advances as at 31 December 2023 of RON 2.91 billion, 2.35% higher than as at 31 December 2022. Agricover Credit IFN generated a net interest margin of 8.17% in 2023, almost 125 basis points higher than the net interest margin generated in 2022, and the NPL ratio was 3.87% as of 31 December 2023, below the local market average for loans and advances to SMEs (4.09% as of 30 September 2023, based on the December 2023 Financial Stability Report published by the NBR). Profit before tax was RON 91.1 million, up 20.17% from 2022.

Agricover Distribution continued to strengthen its customer base, with the number of farmers served during the year reaching 9,100, almost 4% more than in 2022. Revenue from the sale of agricultural inputs was RON 1.85 billion, down 27.3% on 2022, in line with the fall in hard commodity prices (fertiliser and fuel), but also due to a reduction in the quantities purchased by farmers in the difficult conditions of the year.

In the context of a 2022 marked by instability and major disruptions to global supply chains, Agricover Distribution operated with higher stock levels to ensure farmers had access to the treatments they needed. The rapid price adjustment in world markets in the first half of 2023 impacted the company's results, with some of the stock purchased in 2022 being sold in 2023 at the new market price. The company significantly improved its results in the second half of the year, when it achieved an EBITDA of RON 37.6 million, compared to a negative EBITDA of RON 31.2 million recorded in the first half of the same year.

Overall, in the period 2021-2023, affected by supply chain disruptions and/or geopolitical instability, when the company operated higher inventory levels than previously, Agricover Distribution achieved a cumulative EBITDA of RON 127.3 million and a cumulative net profit of RON 56.6 million, including here the result for 2023.

At Group level, Agricover strengthened its market positions in both the agricultural finance and agricultural input distribution markets, gross profit at Group level was RON 61.1 million, with Agricover Distribution's results partly offset by the excellent performance of Agricover Credit IFN.

Last year, the Group invested RON 2.3 million in education projects dedicated to farmers and young farmers, consistent with its mission to support the process of connecting with the agriculture of the future. Ensuring food security in the long term means paying close attention to the pressures farmers are under, including the imperative need for continuous technology or generational change, given that the average age of Romanian farmers is over 58.

For 2024, the Group is planning for profitable growth, aiming to offer synergistic combinations of sustainable farming products, digital solutions and financing solutions to as many farmers as possible to accelerate the adoption of technological advances to maximise yields and improve farm profitability.

In view of its robust financial performance, sustained since its establishment in 2000, Agricover intends to change its policy of not distributing dividends from 2024 onwards, aiming to adopt a dividend payout ratio of 30% of consolidated operating profit after ensuring the necessary funding for the growth of the Group's operations and meeting its commitments to its lenders, as proposed by the Board of Directors.

About Agricover Holding

Agricover Holding is a group of companies operating in the European agribusiness sector. With over 23 years of industry experience and an entrepreneurial approach to business development, Agricover is a generator of innovative solutions that transform businesses and farmers' lives for the long term. Agricover Holding comprises the business lines Agricover Distribution, specialising in the distribution of agricultural inputs, Agricover Credit IFN, a non-bank financial institution specialising in farmer finance, and Agricover Technology, through which farmers have access to the latest innovations in global digital agriculture.