KSG Agro sees declining financial performance
The leading Ukrainian pig farming company KSG Agro experienced a fivefold drop in earnings before taxes to $ 1.8 million in 2022, the company said in its annual report. The net revenue nearly halved, totalling $ 16.2 million compared with the previous year.
In this background, the company generated a net loss of around 1.7 million against a profit of $ 17.7 million in 2021, KSG Agro reported. On the other hand, the share of the revenue from pork sales amounted to 70% of KSG Agro’s total revenue in 2022. This is noticeably higher compared to the previous year. The company’s pig farm sold products worth $ 11.3 million, while the crop division saw its sales standing at $ 4.1 million. KSG Agro, however, has not provided any figures for 2021.
We added Kharkiv and Zaporizhzhia to meet the demand in these regions after production was suspended in the areas affected by the Russian invasion
Sergiy Kasianov, Chairman of the Board of Directors at KSG Agro
Vertical integration
The number of pigs at the farm increased by 5.6%: from 41,400 heads to 43,700 animals. KSG Agro reported that thanks to its strategy of focusing on vertical integration, the company has been able to maintain production dynamics and expand markets since the beginning of the hostilities.
KSG Agro runs its pig farm in the Dnypro region, in the eastern part of the country, not far from the frontline. Despite its proximity to the battlefields, the farm has not suffered any damage.
Positive changes
KSG Agro pointed out that several changes in its business model should help the company stand firm. “It is very important for us that the share of sales of pig products has significantly outweighed the same indicator in the crop segment. On the one hand, we are talking about high-value added products, and on the other hand, this allowed us to develop while helping the Armed Forces and medical institutions in the region with quality pork. Another factor to consider is geography. We added Kharkiv and Zaporizhzhia to meet the demand in these regions after production was suspended in the areas affected by the Russian invasion,” Sergiy Kasianov, Chairman of the Board of Directors at KSG Agro, said.
“Of course, this would not have been possible without our herd rejuvenation programme, which allowed us to maintain a positive trend in livestock growth over the year, as well as without vertical integration. The lion’s share of crop production goes to the production of feed for our herd.”
