Agriculture
Astarta: 2010 Unaudited Results - Reaping the Rewards of Strong Prices - We note excellent results for 2010 as reported by Astarta in its unaudited fi nancials presentation. The company’s FY10 revenue jumped 56% YoY to USD 271mn, gross profi t increased by 78% YoY to USD 102mn, and EBITDA surged 71% YoY to USD 171mn. Despite an overall 2010 performance which gave little cause for complaint, Astarta’s 4Q10 fi nancials were below expectations, with a quarterly gross margin of 18% and an EBITDA margin of just 0.5%. We believe this is a one-off event explained by the fact that the company was forced to purchase sugar on the open market in 4Q10 in order to fullfi ll its contracts. The AST stock now trades close to our target price of USD 35 per share, and we therefore downgrade our recommendation for the company to HOLD.
