News
02.03.2010
Landkom targeting break-even in 2010
Ukrainian farming company is targeting positive earnings before interest, tax, depreciation and amortisation in 2010 despite posting heavy losses in 2009.
Loss before tax narrowed to $42.04m in the ten months to 31 October from $55.74m in the 12 months to 31 December 2008 as the company struggled with a high cost base and depressed commodity prices.
Revenue improved to $14.55m from $10.65m.
New chief executive officer Vitaliy Skotsyk has been working hard at making a number of logistical changes to the company’s operations and has overhauled the management of the company in an attempt to put it on an equal footing with its competitors in the Ukraine.
‘We have implemented a number of material operational and managerial changes over the last six months which means that our cost base is now in line with our peers and that we are able to increase significantly our spring planting programme,’ Skotsyk said.
‘In order to do business in Ukraine it is important that you have some local know-how,’ Skotsyk told Sharecast, adding that a number of its competitors in the country were receiving helpful subsidies from local authorities, subsidies that could disappear ‘overnight’ if political fortunes change.
‘We have had to change everything: people, locations, management structure, equipment, our relations with authorities. We have had to rebuild completely,’ Skotsyk said.
‘We have had to fire a lot of people in the company, both Ukrainians and non-nationals’, he added, but the former manager of Amaco, one of the largest agriculture equipment and input suppliers in the CIS (Commonwealth of Independent States) is a lot happier with the balance now between local expertise and Western management skills.
The company is looking for further land usage efficiencies in 2010 and will seek to rebalance its tractor model portfolio by selling off superfluous or unsuitable tractors and reinvesting the proceeds into more suitable farming machinery.
‘Our business has high operational gearing so any rise in crop prices will be directly reflected in our bottom line,’ Skotsyk said.
sharecast.com
