Holde Agri Invest SA, a Romanian agricultural company operating farmland, prepares to invest 62 million lei in developing its business in 2021. Out of the total amount, approximately 30 million lei will be directed into expanding the operated land and another 32 million lei in the modernization of existing farms. Holde Agri Invest is listed on the AeRO market of the Bucharest Stock Exchange, having a market capitalization of approximately 72 million lei.
“2021 will be a dense year in terms of projects for modernization and optimization of our operational activity. We expect the three farms that we operate to perform even better while we also want to continue to expand the operated land. We look at farms with high potential to quickly achieve our desired operational performance and could be integrated relatively easily into our structure. Our model of restructuring the activity of the farms we acquire has already been tested and perfected during the three years of activity, and we are convinced that it will work effectively in the future as well,” said Liviu Zagan (photo), CEO of Holde Agri Invest.
The investments will be partially financed through the share capital increase operation that will begin this month. The company intends to raise approximately 29 million lei by increasing its share capital through issuing 21 million new ordinary shares. The rest of the investments will be covered by bank financing.
Approximately 70% of the capital raised from the Bucharest Stock Exchange investors will be directed into expanding the operated land by acquiring farms located in Teleorman, Giurgiu, Calarasi, Ialomita, Olt or Constanța. The capital attracted in the capital increase operation, together with the financing through bank loans, will allow Holde to extend the operated land area between 3,000 up to 13,000 hectares in 2021. The company is currently in advanced discussions with five large and three small farms that could be easily integrated into the current farm structure and quickly achieve high operational performance.
The remaining 30% will be used to modernize existing farms, thus leading to an increase in the company’s overall profitability. The modernization of farms includes investments in storage spaces, machinery, irrigation, which can maximize production, as well as investments in agri-tech projects that can provide business synergies to Holde. For the modernization of farms, Holde intends to combine the capital raised through a share capital increase in the proportion of 15% and bank loans that will finance 85% of investments.
“For 2021, we have complex plans focused on investments in storage, machinery, irrigation and farm modernization that can maximize production. We also analyze thoroughly investments in agri-tech projects with which we can have excellent synergies. The expansion of the operated land area remains a priority for this year, but we will be selective. Currently, with a significant size of almost 10,000 hectares of land, we have more opportunities than before, both to increase capital and to invest it in profitable Holde projects,” added Iulian Circiumaru, President of the Board of Directors of Holde Agri Invest.
The investments in modernizing the farms will focus on the two primary farms – Rosiori de Vede and Agromixt Buciumeni. The investment plan includes 6,3 million lei investment in equipment and machinery for the Rosiori farm, 2 million lei in on-farm logistics system according to Holde’s concept, and 7 million lei in the extension of the Călinești silo with 4,400 tons of storage space specially prepared for organic production and the acquisition of additional silage capacity of 6,000 tones to be annexed to the Frumusani farm. Moreover, by the end of 2021, Holde plans to invest in the manure collection and storage platform and a composting station with a capacity of 10,000 tons per year for the Rosiori de Vede farm. For Agromixt, the primary investment will be equipment and machinery, amounting to 13,6 million lei, 1,3 million lei in logistics and 1,4 million lei in the pilot irrigation project.
Out of the total investments of 32 million lei in modernizing the farms, Holde has already implemented projects in the total amount of 5,3 million lei, out of which 4,2 million lei were new equipment and machinery for the Agromixt farms. Currently under implementation are investments amounting to 17 million lei while the other 9 million are planned for this year.
For 2021, Holde aims for a consolidated revenue of 56,6 million lei, +29% compared to 2020, and a net profit of 7,4 million lei. The management estimates the total production to reach 36,823 tones in 2021. As a comparison, Holde Agri Invest ended 2020 with consolidated revenues of 43,9 million lei and a net profit of 3,4 million lei – result generated from the production of 24,003 tones.