Agrowill Group expecting to double its profit to LTL 19.7 million this year

Agrowill Group, the largest agricultural investment and development company in the Baltic states, expects its EBITDA profit to reach LTL 19.7 million in 2009, i.e. almost twice as much (87%) as last year (LTL 11.5 million). According to its estimates, the company’s sales revenue will grow almost 1.5-fold (44%) to LTL 91.5 million. A rise in sales revenue and EBITDA is forecast in view of increased milk yields and harvest, an effective cost reduction programme and consolidation of newly acquired companies into the group structure. 
According to Domantas Savičius, Executive Director of Agrowill Group, the increase in revenue and profit will mostly be influenced by three factors. Two innovative agricultural companies Grūduva and Estonian Polva Agro acquired in the third quarter last year will be fully consolidated into the Group’s structure this year. This will have a positive effect on the Group’s results this year. 
In order to increase the earning capacity and profitability of its agricultural companies, at the end of 2008, Agrowill Group initiated implementation of a comprehensive dairy and crop sector efficiency improvement programme. The programme includes introduction of new solutions in milk production, upgrading and more efficient use of technical facilities, reduction of the cost of products and staff competence development. Implementation of the programme is supervised by experienced foreign experts, namely Teun Sleurink from the Netherlands and Linne Fromm-Christensen from Denmark. Although the programme is expected to be fully implemented in the next two years, up to 20% higher milk yields and 10–15% higher crop yields are expected as soon as this year. Up to 44% higher revenue is expected to be earned from the sale of this year’s products. These forecasts were prepared in view of raw milk and grain purchase prices currently prevailing in the world.  
In an effort to reduce the cost of primary agricultural production and thus boost its competitiveness, new technologies and work organisation principles are being introduced in dairy and crop farms. Based on a new operating model, two large farms keeping an average of 2,000 dairy cows each are being created in place of current 15 dairy farms with different efficiency. Economy and production growth are expected to be achieved through more effective organisation of work, maximum use of existing animal production buildings, recruitment of the best qualified professionals and liquidation of part-time units duplicating each other. Animal feed will be grown and manufactured and the ration will be equalised to satisfy the Group’s needs. This will help to ensure a high quality of feed, better animal health and a lower production cost. The restructuring of crop farms is expected to result in up to 35% higher yields. These farms will specialise in the growth of feed crops and the most profitable grain crops. 
“Given the current economic conditions, we can achieve a maximum operating effect only by maximising the use of our internal reserves,” Savičius said. In his words, helped by experienced foreign agricultural experts, the Group expects to successfully implement the ongoing reforms and significantly increase its sales revenue and profit as soon as this year. 

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