October 5, 2017 / 4:00 PM / 9 months ago

Agrokor's main companies made a combined $500 million loss last year

ZAGREB (Reuters) - The main nine companies within crisis-hit Croatian food group Agrokor [AGROK.UL] racked up a combined net loss of 3.2 billion kuna ($500 million) last year, according to an audit ordered by the company’s state-appointed management team.

Agrokor, the biggest employer in the Balkans with around 60,000 staff, was brought under state-run crisis management after suffering a liquidity and debt crisis.

The new management engaged PricewaterhouseCoopers to revise 2016 results, considering the previously released results unreliable. According to those previous results, Agrokor made a 397.1 million kuna net profit in the first nine months of 2016 and had 45.2 billion kuna of debt.

“After audit we see that largely due to changes in asset and stock value in 2015 and 2016 there is a reduction of value in the balance sheet worth some 13.4 billion kuna,” Agrokor’s crisis manager Ante Ramljak said on Thursday.

The audited consolidated 2016 results for the whole group will be released on Monday.

The highest net loss in 2016 was at Agrokor’s Konzum retail chain, amounting to 1.9 billion kuna. In 2015, the chain also made a net loss of 1.4 billion kuna instead of the earlier published net profit of 235 million kuna.

“Without a one-off asset value write-off Konzum would have had an operating profit of 200 million kuna last year,” Ramljak said.

The crisis management team is due to stay at the company for 15 months at most, during which time creditors are expected to reach a settlement over their claims.

Analysts expect the settlement will lead to the sale of Agrokor’s food production and retail operations, and that creditors will take writedowns on some debt.

“I believe we will be able to reach a settlement as Agrokor’s companies have stabilized its business this year and we see positive results for this year, but the creditors will have to assess how much they will have to write off,” Ramljak said.

Agrokor has yet to make public the overall amount of claims against the company. The creditors include suppliers, bondholders and banks, with the biggest portion of debt held by Russia’s Sberbank.

($1 = 6.4068 kuna)

Reporting by Igor Ilic; Editing by Mark Potter

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