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Russian farming group Rusagro plans more sugar investments

MOSCOW - Russian farming conglomerate Rusagro said on Monday it planned to increase investments in its sugar business after rising global prices for the sweetener helped deliver its best ever nine-month results.

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Maxim Basov, CEO of Russian agricultural group Rusagro. REUTERS/Maxim Shemetov

MOSCOW - Russian farming conglomerate Rusagro said on Monday it planned to increase investments in its sugar business after rising global prices for the sweetener helped deliver its best ever nine-month results.

Rusagro said net profit for January-September was up 45 percent year-on-year on the back of 52 percent growth in earnings before interest, taxation, depreciation and amortisation (EBITDA) and 22 percent growth of sales.

"Rusagro is showing the best 9M financials in its history. Sugar business became the biggest contributor to Rusagro's EBITDA in Q3 and 9M for the first time in three years," Maxim Basov, Rusagro Chief Executive Officer, said.

"The environment for the sugar industry improved globally and in Russia," Basov said in a statement, adding Rusagro planned to increase investments in the segment.

Raw sugar futures are trading near a ten-month high thanks to lower-than-expected output in No. 2 grower India and as rains hampered the cane crush in Brazil's main region.

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The company, which also produces pork and vegetable oils, did not elaborate on the planned sugar investments.

Last month, it agreed to buy shares and debt of major sugar and grain producer Razgulay from the firm's creditor VEB.

It said sugar sales rose 51 percent in the third quarter to 8.7 billion roubles ($132 million) while the unit's EBITDA surged 181 percent to 3.1 billion roubles.

That helped offset a 10 percent drop in revenue from its meat business and a 19 percent fall in that business's EBITDA due to lower pork sales volumes.

The group's total sales were up 21 percent in the third quarter to 17.8 billion roubles, EBITDA increased 35 percent to 6.4 billion roubles while net profit jumped 75 percent to 10.9 billion roubles.

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