Half Year Trading Update

Half year trading update

Landkom International PLC (AIM: LKI, "Landkom" or “the Group”"), the Ukrainian producer of agricultural commodities, is publishing a half year trading update for the six months to 30 April 2010.

Spring planting of over 18,000 hectares continues and is expected to be finished by 15 May.  This is in addition to the 21,383 hectares of winter crop planted in the autumn of 2009. Landkom will publish details on crop planted by region on completion of the spring sowing programme.

As announced on 14 April 2010, the Group’s crops emerged from winter with minimal damage, despite widespread losses of approximately 30 per cent across Ukraine especially in rapeseed, which is Landkom’s primary revenue crop.  The crops remain in good condition, although it is too early to predict yields. 

Costs for the crop planted for harvest this year are in line with the management’s target, which is to reduce operating cost per hectare by at least 35 per cent compared to the 2009 harvest.  These were for rapeseed $1,153 per hectare and winter wheat $842 per hectare. 

Storage is an important area of the Group’s assets, providing flexibility around crop harvest and sales as well as reducing operating costs.  As part of the review of operations, which has taken place since the replacement of the management team, the Group now has 55,000 tonnes of storage located around its seven modules. The Group has also made arrangements for plastic sleeve technology to provide additional storage capacity, if required, at the main Krasne silo base for maize harvested from Landkom’s western operations.  Further storage and drying requirements will be met through lease agreements with local silo owners, if needed.

Plans for the sale of the harvest are underway and the Group’s sales team has started targeting customers, from both the domestic and international markets. 

An analyst site visit is taking place around the Group’s western operations on 11 and 12 May 2010.  No material new information will be made available on this site visit and presentation materials will be posted on the Group’s website (www.landkom.com) in due course.

Vitaliy Skotsyk, CEO commented

“Our operations are progressing as planned towards harvest with costs under very tight control.  The mix of crops harvested over a number of months will ensure our storage resources provide maximum possible coverage for our own produced crop, whilst also giving us the potential to generate revenues through providing third party drying and storage services.”

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