Norofert announces the results for the 1st half of 2023

Norofert, the leading Romanian producer of organic inputs for agriculture, listed on the Bucharest Stock Exchange in the AeRO market (BVB symbol: NRF), announces its financial results for the first half of 2023. For the first time, the company has published financial statements both according to RAS (Romanian Accounting Standards) and in accordance with IFRS (International Financial Reporting Standards) as part of its future plans for listing on the Main Market of the Bucharest Stock Exchange.

According to RAS, the company concluded the first six months of 2023 with a gross sales margin of 26%, a 3-percentage points increase, following production cost optimizations. The company’s recorded turnover is RON 20.2 million, a decrease of 32.5% compared to the same period in 2022, mainly influenced by the liquidity shortage in the agribusiness market during the first half of 2023, with all crops affected by drought. The cereals trading was reduced due to unprecedented price volatility.

“Norofert is consolidating its position in the agribusiness market despite the challenges faced in this difficult year. We announce an improvement in the gross sales margin, as a result of our efforts to optimize production costs. We remain firmly committed to strategic investments for the long-term development of the company. Publishing the financial statements in accordance with IFRS and our plans for listing on the BVB Main Market are steps in this direction. We are pleased to announce significant investments in improving production, research, and development, as well as the efficiency of our resources, to strengthen our leadership position in organic input production for agriculture in Romania and prepare for internationalization,” says Vlad Popescu, Chairman of the Board of Directors, Norofert.

The company’s net profit is RON 3.1 million, a decrease of 45.6% compared to the same period in 2022, due to increased financing costs and delays in the period of grains harvesting, resulting in a delay in recording revenues from farming activities. These will be reflected in the financial statements for the second semester.

Planned investments have continued and have been directed in three main areas: for the Filipeștii de Pădure factory, where improvements to liquid production flow will be made through additional automation and increased production capacity for special products based on microorganisms. The second direction was for the completion of the bacteria research and multiplication laboratory, covering an area of approximately 400 sqm, equipped with state-of-the-art machinery and tools for commercial multiplication and research of bacterial strains for the development of new products and the third one was for the implementation of an irrigation system for approximately 260 hectares at the Zimnicea farm.

Investments will continue in the second half of the year at the Filipeștii de Pădure factory, and the implementation of an irrigation system will begin at the Zimnicea farm. The total cost of investments amounts to 850,000 euros. Norofert has also reduced its level of indebtedness by repaying over RON 15 million from the bank debts without affecting cash flows and current Group activities.

At the Group level, total expenses decreased by 17.5% to RON 22.8 million. The costs with materials decreased by 25.1% compared to the same period in 2022, to RON 11.8 million, influenced by the reduction in the production costs for the range of organic products based on microorganisms, as a result of the commissioning of the laboratory in Filipeștii de Pădure. The laboratory fully covers the need for raw materials for current production.

The consolidated results of the group include both the performance of the parent company, Norofert S.A., and its wholly owned subsidiary, Agroprod CEV SRL. Agroprod CEV cultivates 1,000 hectares of organic agricultural land in Zimnicea, Teleorman County.