Alpcot Agro (STO: ALPA) released its own operational update few hours after peer. Following Landkom acquisition, Alpcot has seen a large increase in cropped area compared to last year. The total cropped area is around 130 000 hectares with spring planting of mainly sunflower and corn amounting to almost half of that. The drought in Russia has put some pressure on the winter crops there but rainfall in most of the regions from the end of May onwards has improved current harvest expectation somewhat.
The company stopped short of giving any harvest estimates besides saying that the company expects a greater harvested volume from Ukraine (where the Landkom acquisition greatly raised Alpcot’s assets) than in Russia. Total cropped area in Russia is 78 600 hectares and in Ukraine 54 800 hectares. In addition to the above mentioned crops, the company has a significant amount of winter rape growing in Ukraine. The current prices excluding corn are higher than last year.
Alpcot Agro is trading at a discount to many of its peers, in some cases even in absolute terms despite clearly larger landbank. This can be attributed to the fact that it is a little bit behind the curve, something the company thinks is an advantage as it feels it can utilize methods seen as effective by others. The fact that a still significant portion of the land it controls is in Russian inland also contributes to that. It has made significant investments in the last couple of years using rights issue proceeds. Some of that was to provide a geographical hedge. Further large acquisitions are unlikely in the next couple of years
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