Agrokultura concentrates Ukrainian land bank to increase

Agrokultura AB (“the Company”), the owner and operator of farmland and agricultural operations in Russia and Ukraine, focuses its Ukraine operations to a core area in Western Ukraine through the divestment of outlying assets. The rationalisation of the Company’s land bank is a key element in the strategic plan to achieve profitability. In order to concentrate the operations to the most productive areas, the Company has recently concluded a number of agreements divesting land holdings in Ukraine. In total 24,800 hectares of land, all of it leased, has been contracted for divestment. In addition, remaining lease agreements in non-core areas have been terminated or swapped for other assets. The Company will hereby divest all land holdings in the Crimea, Khmelnitsky, Poltava, Rivne and Zhytomyr oblasts as well as some land in western Ukraine which was located too far from the Company’s storage facilities. Following the completion of these transactions, the Company will control a well consolidated land bank of about 65,000 hectares solely in Western Ukraine concentrated in Ivano-Frankivsk, Lviv and Ternopil oblasts. All operations will then take place within three hours’ drive from the Company’s operational office in Lviv and in the proximity of the Company’s modern silo facilities in Lviv and Ivano-Frankivsk. Excluding machinery, buildings and biological assets which have been included in some transactions, land sale revenues total SEK 37 million (USD 5.6 million) for an average consideration of SEK 1,471 (USD 226) per hectare. These divestments are estimated to bring ongoing direct cost savings of SEK 10.5 million (USD 1.6 million) per annum, reflecting lower land tax and land rent costs. Besides direct savings in land taxes and lease fees, the divestments are expected to bring greater additional savings across the business reflecting improved logistics, increased operational efficiency and control together with organisational simplification. Ulf Scholander, Managing Director, commented: “The rationalisation of our land bank is central to our efforts to cut costs and focus production resources on the most profitable areas of our operations. Our business in Ukraine will now have a concentrated land bank with a high ratio of cropped to controlled land. This is a very significant step in the turnaround of our Ukrainian operation.” For more information please contact: Ulf Scholander, Managing Director, +380 (67) 370 42 51 Stephen Pickup, Group CFO, +44 782 529 4352 About Agrokultura  AB (publ) Agrokultura invests in farmland and produces agricultural commodities in Russia and Ukraine. The Group aims to generate an attractive return on invested capital by optimally utilizing its agricultural land bank through crop production, livestock and related operations. Shares in Agrokultura are listed in Sweden on the Nasdaq OMX First North exchange under the ticker AGRA and the Group’s Certified Adviser is Remium Nordic AB.