KSG Agro sees hike in profit, and sets sights on European market

“The revenue in 2023 was comparably higher due to lower sales in the first quarter of 2022. These were heavily affected by the start of the Russian invasion of Ukraine,” KSG Agro said. Just like the year before, in 2023 the company used more of its own grain for feed production instead of purchasing it. KSG Agro also started exporting crops in 2023, which allowed the company to increase the sales volume compared to 2022.

Impact of hostilities

Since the start of the Russian invasion, no fighting occurred near KSG Agro’s assets. The company’s pig farm and crop fields are located in the centre of Ukraine, which has not yet seen any fighting. However, KSG Agro’s operations were indirectly affected by the hostilities. “In June 2023, the Kakhovka Dam on the Dnipro River was destroyed as a result of the war, flooding the areas downstream and drying up several irrigation canals upstream,” KSG Agro said. The company added that while it partly relied on water supplied from those canals, they were not essential.

KSG Agro switched to alternative water sources and does not anticipate water shortages in the near future. None of the company’s locations are downstream from the dam, and thus were not affected by the flooding.

Eyeing the EU

KSG Agro is formulating a new development strategy to expand its activity in the European Union. Its target is to have the majority of assets and revenues in the EU within the next 3 to 5 years. “This could be achieved through a series of mergers and acquisitions and financed by a mix of own and borrowed funds, including additional issues of shares,” KSG Agro said.

In the meantime, the company does not plan to dispose of the existing assets in Ukraine. On the contrary, the focus of the new strategy is to expand and invest. It thereby reduces the potential risks of investing only in Ukraine and mitigates the adverse effects on the group’s business of the current macro-economic situation in Ukraine.