WITH RESPECT TO PEOPLE AND LAND

Kyiv, May 15, 2015

About results of the 1st quarter of 2015: growth of profit

In the first quarter of 2015 the Revenue of IMC amounted to USD 32.2 mln. (-19% yoy).
96% of the Revenue (USD 31.0 mln, -16% yoy) was obtained in crop farming segment; 4%
of the Revenue (USD 1.2 mln, -57% yoy) was obtained in dairy farming segment.
The fall in corn prices by 15% yoy was the main reason for the decline in revenue of crop farming segment in the first quarter of 2015. In Q1 2015 IMC actively sold significant stocks of corn harvested in 2014. 198.8 ths tonnes of grains, oilseeds and potatoes (+ 3% yoy) were sold in Q1 2015, including 191.7 ths tonnes of corn (+ 5% yoy).
The decrease of revenue of dairy farming segment was associated with decline of milk
prices in dollar equivalent by 56%, as a result of the devaluation of the Ukrainian currency
(hryvnia).
At the same time devaluation of the hryvnia has led to a decrease in cost of sales by 52%, resulting in increase of Gross profit of IMC by 30% in Q1 2015 compared to the same period of 2014 up to USD 13.9 mln, growth of Operating profit by 38% to USD 7.9 mln and growth of EBITDA by 5% to USD 9.9 mln.
Net cash flow from operating activities in Q1 2015 amounted to USD 12.6 mln.
Due to the devaluation of the hryvnia in Q1 2015 IMC received net foreign currency exchange loss to the amount of USD 28.8 mln. The main part of this loss (USD 28.1 mln) is non-cash loss attributable to the revaluation of the USD-debt of Ukrainian enterprises of IMC, which is held in accordance with the accounting requirements of IFRS. In fact IMC bears no losses associated with the presence of USD-debt at Ukrainian enterprises of the company, as IMC has export USD-revenue from sales of its products, which is used to repay and service the debt. In Q1 2015 the export USD-revenue of IMC was 84% of the total revenue for the period.
Taking into account the above-mentioned net foreign currency exchange loss, in Q1 2015
Net loss of IMC amounted to USD 25.0 mln. Excluding net foreign currency exchange loss, Net profit of IMC in Q1 2015 amounted to USD 3.8 mln.
The devaluation of the hryvnia has led to a formal impairment of assets of IMC in the Consolidated Balance Sheet in dollar equivalent. As a result, in the Consolidated Balance Sheet of IMC as of March 31, 2015 the Effect of foreign currency translation in the amount of USD 112.3 mln was reflected (the amount was mainly caused by the formal impairment of fixed assets of IMC), which led to a negative value of the Equity in the Consolidated Balance Sheet of IMC in the dollar equivalent to the amount of USD 14.8 mln. During 2015
IMC plans to reevaluate its fixed assets in order to reflect their real market value in the
Consolidated Balance Sheet taking into account the devaluation of the hryvnia has
occurred. As a result, the formal impairment of fixed assets of IMC will be offset that will significantly improve the Equity of IMC in the Consolidated Balance Sheet in dollar equivalent.
Following the announced plans to reduce the company's debt in 2015, in the first quarter of
2015 IMC repaid debts in the amount of USD10 mln.

'The first quarter of 2015 for IMC was characterized by active sales of corn stocks harvested in 2014, annual trainings and certification of personnel of the company, preparation for the spring sowing campaign and the completion of the restructuring process carried out by IMC. Despite the decline in revenue in the 1st quarter of 2015 compared to the 1st quarter of 2014, related to the drop in world prices for grain, operating profit of IMC has grown substantially due to the export orientation of IMC and the positive impact of the devaluation of the hryvnia on the financial results of export-oriented companies', - said Alex Lissitsa, CEO of IMC.

For more information about IMC please visit our web-site: www.imcagro.com.ua

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