Good morning, dear listeners. Welcome to Akola Group Investor Conference. I'm Emilija from Nasdaq Vilnius, and I'll be moderating today's event. We will start with the presentation from the management, which will be followed by the Q&A session. Please be informed that this webinar is being recorded and will be available for a rewatch on Nasdaq Baltic YouTube channel. I encourage every one of you to share your questions in the Q&A session at the bottom of your screen. You can submit your questions either anonymously or with your name. With that said, I'm pleased to introduce today's presenter, the CFO of the company, Mažvydas Šileika. Mažvydas, please, the floor is yours. Thank you, Emilija, and good morning, everyone. Thank you for joining Akola Group webinar, where we'll go through the activities of the group, as well as we will present the financial results for six months of financial year 2022, 2023, 2024. Please bear in mind that the presentation might have some forward-looking statements, but this is completely only the assumptions or the current view of the management, and please don't take it for granted. As presented, my name is Mažvydas, and I will take you today through the presentation and the group activities. For the six months ended in December, group manages 70 subsidiaries and two associates. During the quarter, or the six months as well, we have completed acquisition of Grybai LT company, which we bought from AUGA group. So this is a company we added to the structure. We also splitted company called Land vesta into two companies. And the new company now is called Landvesta UAB, which is basically a company who is in a position to develop a solar panel electricity park. We are aiming actually to sell it, so we are not going to develop, but it has all the papers and ready to do that. And after the reporting period, we have closed bunch of companies in the poultry business segment in Lithuania and Latvia. So, with the new reporting, we will have less companies in the structure reported. The geography of the group hasn't changed that much during the quarter. We still are present in the same countries we were a quarter before. So the main highlights of the group for the six months of 2023-2024 is, you know, not that promising at this moment. However, we are going through a period where the calculations for the ratios include third and fourth quarter of financial year 2022-2023. But if you look at the EBIT margin, which stands at 3.13, it doesn't look that bad. It's actually a good result for the group because the five-year average is 2.18, so it's above that. However, it is below the last year. Last year we had a very good result for first half of the financial year, and the EBIT margin was at 5.26%. So it is a difference, it is a change. However, we can see that we are still above and quite substantially above the five-year average. If we go down to the ratios which we calculate on 12-month rolling basis, the story is a bit different. As I mentioned before, the formula or the calculations take into account very unsuccessful Q3 and Q4 of last financial year, and with those quarters included, we have a negative price-to-earnings ratio because we had a loss in Q3 in 2022-2023. Return on capital employed is also very low. It is below five-year average, as well as below last year. And the same story with earnings per share. Due to the net negative result on the 12 months rolling basis, the earnings per share are negative and stands at -0.08. Hopefully, you know, when we go forward, we will roll over the result of the last year, and the ratios should rebound. When we talk about the balance sheet, that it hasn't changed that much. It is decreasing quarter-by-quarter as well as year-on-year. The current balance sheet value stands at EUR 900 million. Last year, similar period, it was above EUR 1 billion. So we are decreasing the balance sheet, and it mainly comes from the decrease of our value of inventory. The prices today are lower than last year. We talk about the main commodities we trade, but the composition of the balance sheet hasn't changed that much. We still have majority of the balance sheet consisting of current assets. We have added some property, plant, and equipment with the acquisition of Grybai LT, the soup production company, as well as the intangible assets. When we look to the working capital, construction and the short-term debt portfolio, it looks like the borrowing base is decreasing further, meaning that both working capital requirement is lower this year due to lower volumes as well as lower prices, and we have more equity in the system, which we use for trading, rather than that. Going to the main ratios of the balance sheet. So, long-term debt and leases are at 37% of the overall portfolio, which stands at EUR 359 million as of end December. The CapEx we managed to make this two quarters is EUR 19 million. So it is an intensive year for the group in terms of CapEx. We are aiming, you know, to build two factories in our food segment. We already acquired one company in the beginning of the financial year. We also are kicking off a seed plant in Latvia, and we're also doing some maintenance and other smaller investments overall. So the CapEx during the second half of the year will increase going forward. We are well positioned to finance our financial year. As mentioned in the first quarter webinar, we have secured all our financing lines, and they are abundant or really sufficient for us to finance this year's activities, and they stand at EUR 520 million. Our capital ratio is improving nicely. The balance sheet is decreasing, our equity is increasing, and we stand now firmly at 34%. By the end of the year, we project it to improve further. The biggest challenge this year is the debt level. For the same reasons as mentioned before, we calculate our debt level covenants or ratios on a twelve-month rolling basis, and you can see that twelve-month rolling basis, EBITDA is only EUR 31 million, which, of course, gives us a challenge in the area of debt, net debt EBITDA, which now looks at 11 times. Net RMI- adjusted debt /EBITDA is also quite high at 7.3, so we are above our targets we set for ourselves. Short recap, what we did with the segments. Just to remind you that we have merged two segments, which previously were grain, oilseeds, and feed with products and services for farmer. And now we have one unified segment, which is called Partners for Farmers, where we report everything which is connected with agriculture in terms of trading, servicing the farmers, providing them feed, feedstuffs, and of course, inputs and buying and trading grain out of the Baltics. Other segments were a bit more clarified, but they remain more or less the same, meaning agricultural production now is called farming. Food products, food production, and other activities are more or less the same. It's a basket of small activities or businesses we own and try to develop. So when we look at our sales dynamics, we see that we have lower sales this quarter, as well as for the six months of this financial year, and they are now even below the sales of 2021, 2022. And the main reasons for that are lower volumes traded in terms of tons. So year-on-year, we have minus 27 on the tonnage we traded, so this year is close to 1.5 million tons in various commodities. Last year, same period was 2 million tons of various commodities traded. That, of course, is mainly impacted from the partners and farmers segments. You will see further on in the presentation how it layers up, but that's the main decrease, and that's mainly influenced our sales. The other reason is we are trading commodities, and we're selling products in lower prices because sales decreased more than the tons we traded, and the sale decrease stands at 33%. So, you know, both lower tons and lower prices impacted our sales revenue. However, I would really like to emphasize that we are on track with our strategy, which is to increase our earnings and EBITDA from our food production businesses close to 30%. You can see now that the sales are nicely edging to 30%, and for this half of the year stands at 26% coming from food product production segment. When we look at the gross profit composition, we see that the trends remain very similar. We delivered seventy-seven million of gross profit. It's comparably lower number than last year, however, higher than in 2021, 2022. But when you look at the margins, the margins are actually quite nice. For six months, the gross profit margin stands at 10%, which is actually higher than last year and the year before, and it's much higher than five-year average, which is 6.7 for the first half of the financial year. So meaning that with the lower, sales or the lower volumes we traded, overall, the trades were more profitable. One part of that. The other part is that the earnings coming from food production are much higher and much, profitable. So you can see that now, gross profit coming from the food production segment stands at EUR 28 million, which is 37% of the gross profit, whereas last year it was only EUR 12 million, and it was eleven percent of the overall gross profit. So, so it means that, I want just to reiterate that, that the food production is more and more visible in our portfolio. It gives more stability as well as more margin to the overall profitability. And in food segment, it's both. Our grain-based foods produced better results, but, of course, the winner or the star of the first and the second quarter is poultry production because now we have three quarters in a row where poultry production is rebounding and delivering good results. So you can see how much that affects the overall group results when we talk about good poultry performance. So we can move now forward to the operating profit dynamics. It is much lower than last year, but as I mentioned before, you know, last year was really exceptional for the first half of the year. The second half was a very different story. We delivered EUR 24 million in operating profit. Nice split between production, food production and Partners for Farmers segment. However, you can see here that farming is lagging a bit behind, and it has a negative result for the first half of the year. It also impacts our margins. Margins are now in the operating profit level, lower than last year. However, they're still higher than the historical average, which for five years stands at 2.2%. So what actually this tells us, that even though we had a good profitability and gross profit margin, however, we carry a significant part of our fixed operating expenses. So the overall mass of gross profit we produced was not enough to cover our operating expenses in the same manner as we did in the gross profit level, and thus, we are producing a bit lower results overall in the operating profit level. Especially that was evident in the second quarter. So first quarter was really strong. Second quarter, due to, you know, lower trading activity, lower activity from the farmer side, as well as, you know, poultry was very strong in first quarter, slower in the second quarter. That's impacted our operating profit. So, but, you know, moving forward, I think that should even out throughout the year. So let's look more now attentively to the segments themselves, and, Partners for Farmers is the first one. I will first talk about the sales. As you can see, the main impact for the group, consolidated sales, of course, comes from this segment. So we have a difference of, roughly EUR 400 million in sales for this segment compared to last year. So this year is EUR 574 million in sales. Last year, it was close to EUR 1 billion. So that's the main difference, and the main difference comes from grain trade. So you can see that we have traded roughly 655,000 tons of grains and oilseeds last year, whereas last this year, sorry, whereas last year we have traded 1.2 million tons of grains and oilseeds compared year by year. So it's a huge difference. It's almost 50%, and that's where you know both ton difference and sales in terms of euros comes from. Because other segments, you can see that, feed and inputs, they are roughly in the same level or even growing, a bit. So that where the sales impact comes from. So when we look at the gross profitability, of course, it's lower than last year because, you know, the last year was phenomenal for this segment, which impacted the overall consolidated group result. But when we look at grain storage and logistics part, you know, higher quantities coming to our grain elevators and higher income from drying and cleaning services improve the gross profit. So more or less, the result for the full year already is visible in this segment, so it's better than last year by EUR 3 million. If we look at grain and oilseeds trades, it's of course lower. Both profitability-wise, it's lower, as well as volume-wise, it's lower, so we have 5 million versus 26 last year. However, if you look at the gross profit for this part on a 5-year average basis, it is better. So the trades we made actually are quite profitable. However, we have lower trading volumes, and looking for the second half of the year, you know, in the end of December, we still had roughly 500,000 of grains and oilseeds still to trade. So for the next half of the year, we still have a significant amount of grains and oilseeds to trade where we know we expect or we hope that, you know, they will improve the result going forward. So feed business is doing as well, worse on gross profit basis compared to last year. Feed production, compound feed production is quite stable. It delivers a good, stable results, quarter by quarter. However, raw material, feedstock trade is a bit more, and feed additive trade is a bit more complicated this year. There are many reasons there. You know, we have complications on the Polish-Ukrainian border to trade. The prices are a bit more volatile this year, so the result is also a bit different. When we look then at inputs, inputs are growing quantities-wise in the main categories. We have... And we see normalized profitability margins for main part, main fertilizers as well as seeds. However, plant protection micronutrients category this year is struggling, and it's struggling because, of course, maybe the weather was not really good in autumn for application. Prices are a bit depressed for main grains, but also we evident a very high oversupply in the market, which increases the competition between the traders quite hefty. Agricultural machinery delivered very similar result as last year, even though we have a slight decrease in margin. Overall, the market is very challenging. The market is decreasing by 15%-20% this year, so the competition is really fueling in. But for now, the first half of the year was quite successful for our machinery trade. Let's move to the food production part. So in terms of sales, the results are only slightly lower, but in terms of tons and quantities, we delivered more. So overall, the segment is really doing very well, and that comes partly from poultry business. You can see that in terms of gross profit, we have EUR 16 million versus EUR 11 million, and this EUR 16 million already makes the poultry business in black figures when we talk about net profit as well. So that really helps a lot because that gives stability, and we can see that that came from, you know, quite good pricing. Whereas, you know, our input prices decreased, meaning energy and feed. But of course, the price pressure from main buyers and supermarkets is coming in for the next half of the year, so we will see where we will end up, but so far, the dynamics were favorable for us. Other foods are delivering as well very good results. We can also see that it includes five-month results of our new company, which we acquired from our group, Grybai LT. So it is now included in instant food products. So all the categories in our food production are growing, they are stable, and that's why we delivered the very nice results of EUR 28 million of gross profit compared to 12 million EUR last year. We have a good cost structure. We still have a good pricing lift up. Of course, you know, that that cannot persist for a very long period. We will see pressure for our main buyers as well as competitors on the pricing side, but we see the dynamic so far is good. We are able to manage our input cost quite well. Agricultural production, a very mixed feelings for agricultural production production so far. Sales are lower because the main prices for main grains are lower, meal prices are lower as well. But if we exclude our sugar beet production, the harvested quantities year to year are very similar, we can see flat. So, with all the challenges, with all the dry weather we had, during last harvest, we delivered a good result in terms of quantities. However, the prices which we get for the crops is 30%-35% lower. So of course, the input prices are decreasing as well, but still a gap remains because they are decreasing slower. However, you know, for the six months, or by the end of December, we still had around 40% of our grains, which we harvested, unsold. And looking at the dynamics of that, it should improve the result going forward, because overall, you know, those are quantities which we will still trade. Looking forward, so we roughly sow 5% less of winter sowings. That's not that much significant number, but it's a lower number year-over-year. So far, the crop condition after the winter is quite good, so we'll see how the spring goes and of course, the beginning of the summer. Meal production really doesn't help the segment this year. You can see that last year we have a gross profit of EUR 3 million; this year is only EUR 1 million. The prices are really depressed in the market. They are 25% lower and you know, there are some signs of increase. However, they are still very challenging, you know, and not that favorable for us. So the prices are not favorable, the costs are increasing. Inputs, you know, feed prices are decreasing, but they are doing that slower than the price increase. So it is not a very favorable conditions as of now for meal production in the market. So, please, subscribe to our newsletter. If you haven't done that yet, you can do that if you go and you jump on our website, which is akolagroup.lt, and you will receive all the latest news from us. Rather than that, thank you very much, and I am looking forward for the questions. Thank you for the comprehensive presentation. Now we will proceed with the questions. Before that, I would like to remind you that everyone can submit the questions in the question box on your screen. The first question is regarding investment targets. In a recent interview to Verslo žinios, Mr. Zubas stated that Akola Group has a five-year strategy, which foresees EUR 300 million investments and a target to boost sales to EUR 3 billion. How... Could you please provide a bit more flavor about investment targets? Yeah, so that's that's part of our five-year strategy, and we have built it around several pillars. One pillar is that we want to be, and we want to remain, the leaders and partners to farmers segment, meaning that we have to be the best performing player or the best partner for farmers in Latvia, Lithuania, and Estonia, where we sell inputs. We want to be an efficient grain trader, so we want to maintain our market share. The other part is built on vast expansion in our food production businesses. We want to increase, which I have really mentioned several times before, and we're steadily increasing our food production segment, meaning that either expanding our existing businesses or adding new ones. So we're expanding our noodle instant noodle production. We are building a factory in Alytus. You probably know that we have communicated that to the market. We're also building a new breadcrumb factory in Kėdainiai, which is also expanding our existing business. That was also in the news, and we added new businesses like the AUGA soup business, which we bought. So that's also putting something into our portfolio new, which we think we can grow. So a food part is mainly about instant, ready-to-eat, convenient foods. That's the segment we really believe in. Because, you know, people are busy these days. Life is very fast quick. And that's where we think is a growing nice segment where we can save time for people, and those really tasty, healthy, ready-to-eat meals can, has a, has a good—has a good trend. The other part of food production is expansion, is that, you know, we are actively looking for acquisitions outside the Baltics. We also have said that several times. We don't have yet things to communicate to the market, but we are working on that. That would be something new for the group. We are really cautious about this, and we want to make it, of course, successfully, but we are actively working on that. So that would be also in the same area, which I have mentioned, before, either in our existing, business, food business portfolio or something very similar in the segment of ready-to-eat, convenient foods. So the other part, of course, we want to maintain our, arable land, which we have. We are not maybe planning to expand it a lot, but, we want to maintain it. We want to be a very efficient agricultural production, and of course, we want to be, a significant player in milk production part. So you know, having all this in mind, that's how the strategy is built, and that's how we based our EBITDA target. So now the long-term EBITDA target, which we communicated to market, is in the area of EUR 70 million-EUR 90 million. When we will implement those investments, which we have now in the pipeline, we will probably reiterate, and we will issue a new long-term target for the group EBITDA. So we will see what will be the market conditions. Are we going according to the business plan? And you will see, you know, how we see the growth in EBITDA as well. And this year is very significant because part of those investments, which was mentioned in the interview, a significant part of that is done this year. This year, we have planned somewhere in between EUR 70 million-EUR 85 million of investments. Next year is still being planned, but things like seed production plant in Latvia is going to kick off. That's a significant investment, and that's one of the things where we are aiming to maintain our leadership. We are the main market player in seeds and seed production in the Baltics, so that's, you know, what we're strengthening. Then we have our biogas part. You know, we have already started production of, sorry, construction of biogas plant in our Lukšiai, Lukšių ŽŪB. So that's also an area where we want to maintain the efficiency of our agricultural production, and we are also looking to do the same in our poultry segment. That's, of course, not yet communicated. We are still working on that, on the business case. It's still in the blueprint part, but that's the area where we think biogas also should work because we have the input, we have the manure. We have the manure coming from the chicken growing, and that makes complete, you know, logic and sense for us to look. So, the other parts with the acquisitions or the expansions and the investments, that's still to come, you know, and as soon as we will have some news, we will share, either in terms of organic growth, organic expansion and investment into our existing businesses or, you know, acquisition-wise. This is the background where that's actually the future sales growth has to come, as well as future EBITDA. So that's everything around that, and to be completely precise, our five-year strategy is built until the year 2026, 2027, meaning our financial year. And closer to that, we will review the strategy, how we performed, and we will build, you know, upon that for the next five year. We will communicate that to the market, as well, in a timely manner. What should and could you actually expect? Thank you for the question. The next question: Could you please indicate total CapEx for this financial year and next? So this financial year, I just mentioned, is somewhere between EUR 70-85 million. So a few things are still ongoing. As usual, you know, a few things carry over to next financial year, but you can expect to have it somewhere in that area. For the upcoming financial year, we haven't yet planned. I don't have a precise number, so I wouldn't like to give you a misleading figure. So, we will communicate that when we are actually ready. The next question. Given Q2 results, are you still targeting to meet budgeted EBITDA? ... we are still on track to be in the gap of EUR 70 million-EUR 90 million. That's probably what I can tell you. We haven't, you know, revised that. However, I want to emphasize that spring is very important for us, you know, because spring is still a very active period for input sales. As well, you know, you can see that we still have a lot of grain to trade, so it really depends how we will trade the grain. And, you know, other parts like machinery sales are crucial. So, you know, we are as of now, we are aiming for that strategic number, but spring is really very crucial for us. As you can see, last year, spring was really challenging. Very cold conditions. Farmers went very late into the fields. They were making all the decisions to buy inputs very late into the year, and that influenced our results a lot. So spring is crucial. Let's wait for the last two quarters, but we are keeping our forecast in that strategic gap. The next question. Food product segment revenues were down. Could you comment on reasons and demand-side dynamics? Dynamics of demand are good. The sales are only slightly lower, and that comes from a lower sales price. Basically, you know, the main parts of the products we sell tend to decrease in price. Only... That's the main reason, and it's only, still only a slight effect. Because everything has price pressure. Poultry products has price pressure, noodles, breadcrumbs, flour, you name it. Everything is decreasing because after, you know, the high inflation, supermarkets and consumers are looking for cheaper offers and cheaper solutions. So there is price pressure coming from the demand side. However, as of now, as of end of December, the decrease was only a slight or minimum. Could you give arguments why grains trading segment was merged with services for farmers segment? Is it willingness to hide unsatisfactory results of trading? No. I mean, we see as management that one segment as one whole. We manage that, like, in the board and the management level, we see that as one segment. That's one of the key reasons. The other part is that that segment more or less runs around the farmers. So basically, the dynamics, the fundamentals which influence the segments are the same. Basically, farmers, farmers' financial health, grain prices, grain demand, supply, input demand, supply, and demand side. So we wanted to show the investors the segment in the same way we look at it, as well as, you know, that's everything about the farming and farmers and grains. Could you please elaborate a bit more on competition in grain input trade? Yeah. So, this year, the quantities of grains are fine. They are close to the, a bit, higher than historical average in Lithuania, so there are enough quantities actually to trade. You can see that we had a successful year with our elevators. We, managed to take in, more grains than last year, so we have enough grains to trade. Latvia and Estonia is a bit different situation. They have 5%-10% lower in grain quantities because the weather conditions there were even, more rough than in Lithuania, especially in Estonia. There, the situation in terms of grain trade or grain production is really difficult. In terms of inputs, so input-wise, you know, the competition persists, especially in the plant protection part, because there is a huge oversupply from the trader side, in the market. So, really, a price pressure is there. Also, the weather in autumn was not that good for application of plant protection products, so farmers were, you know, a bit hesitant, to buy them. The other thing is that, you know, the grain price was not that favorable for farmers, so they were not that willing to sell, the grain in autumn, and they were keeping them, and hoping for better prices in spring. So that also influenced farmers' decision to buy inputs, including plant protection. You know, that they were a bit stranded on liquidity because we didn't sell the grain. So input part is a bit more challenging in terms of competition, but especially the plant protection. Fertilizer-wise, quantity-wise, we're doing good. We are growing a bit, and as well as the profitability coming for there is quite normalized. Thank you. It looks like we've covered all your questions so far. If anyone has any questions, feel free to enter them in the Q&A now, or contact the company later. On behalf of Akola Group, thank you, everyone. It was a pleasure being with you today. The recording of the presentation will be available on Nasdaq Baltic YouTube channel. Mažvydas, thank you for a very informative conference. Thank you very much. Thank you for joining us.