In the challenging context of the agricultural sector this year, Holde Agri Invest reports +31% production and 76.6 million lei revenue, down by 11%, in the first nine months of 2023
23 November 2023
Holde Agri Invest SA, one of the largest farmland operators in Romania, reports a production of approximately 56,000 tons in the first nine months of 2023, up 31% compared to the same period last year on a total operated farmland of 13,725 hectares.
In terms of financial results, in the first nine months of the year, the company recorded total revenues of 76.6 million lei, down 11% compared to the first nine months of 2022, and a net loss of 22.9 million lei, amid a farming year in which, although the costs of setting up the crops were extremely high, even five times higher than historically, the prices for capitalizing the harvest at market rates were much lower, even at half of 2022 price average.
“In 2023, we continue the growth pace at the level of the annual harvest for the fifth year in a row. The higher yields are mostly the result of the improvement of agricultural techniques within each farm, the consolidation of cultivated areas, and investments in machinery, agricultural techniques, and efficient management systems. The merit of Holde’s operational team, which has matured and paid off in carrying out agricultural work every year on time and to the highest quality standards, is indisputable. However, 2023 is the first year since we have been operating, in which we will report an accounting loss. It is a year that we anticipated to be difficult, but without being able to absorb the real magnitude of the negative impact. Despite all the efforts made by our team, even in the context of good production, this year will probably remain the least profitable year we have experienced,” stated Liviu Zagan, CEO of Holde Agri Invest.
In the first nine months of the year, the indirect expenses of the Holde group, such as those related to the headquarters, repairs of agricultural machinery, repairs of the fleet of cars and trucks, transport of the harvest, and other administrative expenses, decreased by 26%, considering that the cultivated area of the company increased by 14%. The reduction of these costs per cultivated hectare is even more significant, reaching up to 60%. Holde’s management believes that these indirect cost reductions will continue with the increase in operated farmland and thus reaffirm the increased yields that modern large-area agriculture brings, contributing to the additional profitability of Holde’s operating model.
In the first nine months of 2023, Holde continued to expand the cultivated areas. During this period, a new farm was acquired, which was added to the Contesti core farm, with an area of 980 hectares. Holde is forming the fifth core farm, which will be located in a new area and help the company further reduce the risks of weather conditions. In addition, this will be a farm where up to about 2,500 hectares can be irrigated. The new core farm will be taken over with an irrigated area of approximately 700 hectares, so the total irrigated area at the group level will reach about 1,000 hectares.
In 2024, Holde management aims to grow irrigated corn and potato chip crops on the new farm. The potato chip crop performed very well in 2023, and the company is receiving more and more requests for it.
“Despite this year’s result, we are convinced that agriculture can produce profit in the medium and long term. We reiterate the premises we believe we must consider when investing in agriculture. Holde is in the fifth year of the ten calibrated in the vision we prepared for when we started the project in 2018. Good results are obtained over time. We are convinced that 2023 will remain incidental, in the market circumstances, impossible to predict and neutralize completely. We believe that as investors, we must mobilize and support the company to continue on its way and return to the profitability premises originally thought, which it proved between 2020 and 2022. An agricultural business lends itself to scaling. We have proven that there are economies of scale, and we believe that tough years can be overcome more easily with a large-scale area and investment – an area that produces enough to compensate for the more difficult times, such as 2023“, added Liviu Zagan.
To continue its development and transform the company into one of the largest farmers in Romania, Holde is currently conducting a share capital increase of up to 40 million lei. Holde aims to expand the operated farmland through this increase by acquiring new farms, implementing the current investment plan, and ensuring the additional working capital needed for long-term production storage.
About Holde Agri Invest
Holde Agri Invest is a company initiated by a group of Romanian entrepreneurs with the objective of developing it to become a leader in the field of agriculture in Romania. Founded in 2018, the company operates over 13,700 hectares of farmland, organized into four cores – Rosiori farm located in Rosiori de Vede (Teleorman county), Frumusani (Calarași county), Videle (Teleorman county) and Contesti (Dambovita county). As of October 2020, Holde Agri Invest is a public company listed on the AeRO market of the Bucharest Stock Exchange with the symbol HAI. As of October 2021, the company is included in the BET-AeRO index of BVB, having the second largest weight.