Power Point from the General Meeting 230524:
UK Power Point from the General Meeting 230524

 

Minutes from the general meeting of Agri Invest on Thursday 23 May 2024
In Tårnsalen at Agri Nord, Hobrovej 10, DK-30 Aalborg SV at 10.30 am.

1: Election of the meeting chairperson.

Hans Peter Storvang proposed by the Board of Directors and elected.

It was established that the Annual General Meeting was legally convened and reviewed the agenda.

Vote counters: Employees from Agri Nord.

Minute taker: Birthe Dencker Sørensen

2: Report from the Board of Directors on the activities of the Company over the past year.

The chairman bid welcome – also to the Teams participants.

At the Annual General Meeting last year, a record profit was announced for the second year in a row. Unfortunately, this is not an option this year.

At the same time, we knew that 2023 would be a challenging year, especially with expensive fertiliser purchases and falling crop prices.

At the shareholder meeting in December, we reviewed the entire operation, but will give a brief summary as it is, after all, the basis for the results we deliver.

More about accounting under the review by Christian Brasholt.

PP page 4: Highlights and KPIs:

Lower yield and price at the same time as expensive input is a bad situation.

It was extremely dry in the east for the second year in a row, and we realised it was costing yields.

There was a lot of rain in the west, but it did not produce the expected results in the winter crop.

Maize and soya benefited greatly from the rain and produced top yields (although maize in the east produced low yields).

In autumn 2023, a lot of oilseed rape was sown, but the rain didn’t come, so all the oilseed rape in the east and half in the west was resown. The costs for this are included in the 2023 annual report.

Annual result of DKK +2.2 million and increasing equity, which is now at 601 million.

PP page 5: Equity:

With the operating result we are delivering this year, the increase in equity is primarily a result of the land price, which is again evaluated by Dadarian. A large, recognised valuation company.
The book value is now calculated at 187.6.

PP page 6: Price development:

Dropped from 150.25 to 149.79 on 31/12/23. Now here at 21/5 back at 150.02.

There hasn’t been much fluctuation compared to the past.

PP page 7: Field plan 2023 + Budget 2024

12,349 hectares was the field plan in 2023, and we are continuously working to expand the area. This is done by bringing more of your own land into operation through increased and improved mapping. We have several new lease contracts + the purchase of small areas of approx. 0.5 – 2 hectares, which are located in between the parcels we already own.

The increased area will also compensate for areas we seem to be losing in the future to solar panels, which means that in harvest 2024, we will have approximately 13,200 ha.

PP page 8: Production volume budgeted/realised:

Missing in 2023: 5,000 tonnes of wheat, 1,000 tonnes of sunflower and 700 tonnes of rapeseed, but gained 800 tonnes of soya

PP page 9: Sales prices

Falling prices from budget time to sale.

PP page 10: Extract of realised yields:

Overview from 2017 to 2023 + budget 2024.

PP page 11: The result in brief:

We expected a loss for 2023 when we held our shareholder meeting in December, which was due to a lack of yield, high production costs and falling sales prices. However, it was a plus anyway, due to the conditions outlined in the PP.

PP page 12: Valuation of agricultural land

Total increase in value of approx. 14.5%. The increase of 14.7 in 2022 covered the two previous years where there was an overall revaluation. So, a nice increase in the land over the period.

PP page 13: Land in cadastre:

Slowly moving in the right direction now that we have reached 93% compared to 90% in 2023.
From New Year until 30 March – approx. 0.5% forward again.

PP page 14: Organisation in Denmark:

Agri Invest has been board-driven since 2016, but in the autumn of 2023, the board reviewed this to improve it going forward.

Bent Jeppesen, Jørgen Stougaard and Preben became the chairmanship/business committee with powers set by the board.

The FU submits proposals for decision to the board.

We see it as a reinforcement, also in relation to the changes that have taken place in Romania.

PP pages 15 and 16: The organisation in Romania:

Last year, we also announced that we wanted to strengthen and modernise the organisation with a controller/office manager with the desire to have smarter and more digital workflows, better service to the farm sites, and better and faster reporting to DK. It didn’t work out as expected, and a new CFO/office manager was sought in autumn 2023. We employed Robert Lisenche, who started on 1/2/2024 (was selected out of 16 applicants).

We have reduced from two to one lawyer, as we have come so far with land in cadastre.

In total, we now have 70 employees in Romania, and it works very well and satisfactorily.

PP page 17: Focus points:

See the overview on PP.

Land is always a focal point. Even though we are very far along with cadastral registration, it is important to get maps with the exact location of all land parcels. The best way to do this is for the government to register all the missing parcels and draw them on maps with precise locations. We have just seen a positive effect of this in Oravita. The completed area of 25 hectares turned out to be owned by the municipality, and we won the tender to rent the land.

There’s more like it on the way, and we hope to win more of it. It’s land we cultivate and can now get it under contract and thus entitled to apply for ha support during the coming year.
Small parcels of land continue to be purchased in our cultivation area at a price of EUR 4,000 to 5,000/ha. For larger parcels, it’s significantly more – around EUR 6-8,000.

PP page 18: Ongoing energy projects:

See the overview on PP.

PP page 19: New areas in operation:

See the overview on PP.

PP page 20; Map of production sites

Overview of the location of the different sites.

PP page 21: Storage and silo capacity:

Last year, we expected clarification on silo capacity in the Videle area before harvest 2024, but unfortunately this has not happened. Now, however, it looks like that process may be gaining momentum.

We will solve the challenge as before with the sale and collection of crops in harvest, which unfortunately also means higher costs and more hassle.

PP page 22-25: Budget 2024 by Christian Brasholt

Updated with the field plan compared to what was presented at the shareholder meeting. The current expectation is a profit of DKK 18 million. Primarily due to the larger operating area.
The uncertainty lies very much on crop prices.

PP page 26: ESG Report

ESG Report 2024 has been prepared and published on the website.

When we hear about what is important in Europe, it’s about nature. We have areas we can’t cultivate, so we can highlight that in next year’s report. To be expanded in line with developments and be part of the Annual Report in the future.

Regarding the budget, we are now looking into the future and very soon harvest. Jan already expects to start harvesting wheat around 8 June (so now it could be a harvest trip for the shareholders who are going on the shareholder trip here from 9-13 June!).
A warm February boosted growth.
Wheat and oilseed rape look okay, but spring-sown cereals are a long way from harvest and there should be a lot of rain in the near future.

In the east, it’s very dry again this year, but we have been lucky with a few rainy days and slightly lower temperatures. There are also large areas of spring-sown crops that need rain in the coming months.

When it comes to selling the company, there are ongoing enquiries that we are always looking at. So far, nothing has materialised.

However, we feel that we are positively recognised in the industry as a well-functioning company with good future prospects. When we have had applications for jobs and at banks, we have also been evaluated favourably.

During the waiting period, we will endeavour to create an operating profit that can give rise to a dividend payment.

Net profit for the year

Unfortunately, it was as it was said from the rostrum last year:

“We shouldn’t get ahead of ourselves, but there’s no doubt that 2023 will be a challenging year as it stands.”

We know that there are many farmers in Romania who are hard pressed and with a worse result than what we delivered. We cannot and should not be satisfied with a profit of just over DKK 2 million.

However, it’s important to recognise that we have employees who can stay focused even in the face of strong headwinds.

The chairman thanked all the good employees and especially Jan and Steen, who once again this year have performed at a high level and maintained focus. He thanked Birthe, who solved the task of last year’s dividend payment (I hope she only has to do it this year!), all business partners and shareholders for their support, the board for their excellent collaboration, which is much appreciated, and a big thank you to Christian for again this year ensuring that no Romanians get through with figures that are incorrect. Thank you.

3. Presentation of the audited Annual Report and management report for approval by Christian Brasholt.
See the overviews in PP pages 27- 40.

Christian went through the group overview and accounts.
Equity increased to DKK 601.2 million from DKK 570.3 million. Primarily because the land is recognised at valuation with a net adjustment of DKK 54.5 million in equity.

(Also see PP page 39 for an overview of equity from 2016-2023).

The liquidity ratio is lower than before, as in 2023 money has again been withdrawn for distribution.

Debate:

Harald Thomsen – Asks about rising interest rates and has debt increased?

Preben: There has been more withdrawals on the account, also due to dividend payments two years in a row. Rising financing is both interest and capital loss. Interest rates had risen from around 5 to over 8 but have come back down somewhat.

The report and the Annual Report were approved by the meeting.

Re. 4:  Decision on the appropriation of profits or covering of losses according to the approved Annual Report.

As the Board of Directors has not proposed a distribution, this cannot be adopted at the Annual General Meeting.

5: Authorisation for the company to purchase its own shares.

• The Board of Directors recommends that it be authorised to purchase own shares.
• Maximum transfer price equal to the net asset value in the most recent annual accounts.
• The option to buy back up to 10% of the nominal share capital.
• The authorisation is valid until the next annual general meeting.

The proposal was adopted by the assembly.

Ole Bouet: How many shareholders are there currently?

Birthe: 259 at present.

6: Elections to the Board.

Preben Hansen, Claus Nørgaard and Anders H. Nørgaard were all re-elected without any other proposals. Preben gave his thanks for the re-election.

 7:  Appointment of the auditor. The Board proposes the re-election of BDO.

BDO was re-elected without a written vote.

8:  Any proposals from the Board or shareholders.

Nothing received.

9:  AOB

Poul Bech Sørensen:

First Farms has joined the shareholder base – how does the partnership work and can they see themselves owning a larger share?

Preben: Works completely according to plan and well, as it has always done. Don’t know their plans to buy more shares.

Svend Jensen: Interest rate – what do we give in RO? We have a book value of 187.6 – if we are to sell, we need to do due diligence, which costs a lot of money. Has it been discussed regarding taxation, etc., in the event of a sale?

Christian: The book value of 187.6 is what the accounts say and is pure maths. The tax is paid via deferred tax, and it will be individual how the taxation will be for each shareholder. Depending on whether the shares are owned by a company or a private individual.

Preben: The actual value is higher. In terms of interest rates, it’s been more expensive to borrow money in RO, and every time we make an investment, we also have to borrow a little. We secure a credit line so we can act if we have a bad year. Gives about 1% more in RO.

We are in the process of creating new agreements and interest compensation solutions to change the way we work with Romanian banks. As long as interest rates are high, we have a surcharge.

Niels Åge Fristrup: Nine new full-time employees and very little sold of the 2024 harvest – is this a deliberate strategy?

Preben: The nine employees are primarily from the Sarmit company that joined in 2023. It is fully staffed. The eight are from there and only one more in Oravita. Wage increases have been strong in RO. Last week we sold some of the new harvest, but we aim to spread sales throughout the year.

We don’t have much storage capacity in Vanatori and Videle, but we won’t dare to use it all at once until we know the yield. Expect to sell around 4,000 tonnes extra right now. For example, we are cautious with oilseed rape, where a hailstorm can severely affect yields.

Stougaard: We are cautious about selling anything that is not in the silos.

Bo Arvin: What is the negotiation level if we want to sell? And is there interest?

An 8% interest rate can’t be negotiated with a company as big as AI?

Preben: The last time we talked sales, the price was around DKK 750 million, and it hasn’t gotten any cheaper. We must sell the whole AI package, as legislation says we can’t sell parts of it.

The interest rate has been negotiated down to 6, and currently we can’t go any lower. We must pay a small commission to keep a little credit on hand, which we need in case something extraordinary happens.

We can now draw DKK 10 million more than before as we have an increased value increase in the company and good collaboration with banks.

Evald Borup: Shareholder status in 2024?

Preben: 19 participants will be travelling from the 9th – 13th of June – most of them leaving from Denmark.

Torben Lauridsen: 31 wind turbines – do you have any idea what this could bring to the company?

Preben: Three years since the contract was made and it was only EUR 100/year/turbine. Will give about EUR 8,000/turbine/year when they are set up.

Jens Andersen; How are the spring crops doing?

Preben: Very good, they have got off to a good start, and of course needs some water during the growing season.

Per Pedersen: Have you calculated the irrigation systems? Always hearing it’s water we need.

Preben: I’ve looked into it in the areas, but if you are watering land you don’t own 100%, it’s a bad thing. Hard to make sure we are not watering small areas that aren’t ours. However, it will definitely be attractive and a good opportunity.

Jens Peter Hedevang: Energy labels – how much can we expect in fixed rental income?

Preben: There are reservations for 2,000 hectares – how many will materialise, we don’t know. They have been running for so long now, and we’ll see when the first ones get going. I can’t put a number on it right now, but there must be a realistic probability that some of it will materialise. We do what we can and hope to see results soon.

Preben pointed out that he is stepping down as chairman, and at the next board meeting the board will look at the constitution and change it to be more correct in relation to the current practice.

The meeting chairman and chairman thanked everyone for a good general meeting.

Yours sincerely,
Preben Hansen, Chairman of the Board