SOURCE: Soil Biogenics Limited

November 11, 2008 14:15 ET

Soil Biogenics Limited, a Biotechnology Company Focusing on Development and Production of Ecological Composts and Soils, Is Pleased to Announce Preliminary Results for the First 10 Months of 2008

MOSCOW--(Marketwire - November 11, 2008) - Soil Biogenics Limited (the "Company," "Soil Biogenics") (PINKSHEETS: SOBGF), a biotechnology company focusing on development and production of ecological composts and soils, is pleased to announce preliminary results for the first 10 months of 2008.

"PIKSA INTER LTD," a wholly owned subsidiary of SOIL BIOGENICS LTD, is pleased to announce that it has finished deliveries under the 2008 season program. Revenue for the 2008 business year has reached 6.9 million USD, which is 53% higher than the previous year. This was achieved without any substantial increase in production volumes, since 2008 has been a particularly difficult year with respect to weather conditions. The 2008 season recorded the heaviest rainfall for 150 years, i.e. since weather has been statistically recorded. As the production of PIKSA fertile soils is done in the open air, the plants were out of work for 60% of the production time. Without the exceptionally difficult weather conditions, the production could have been double the present figure. Another factor that penalised resulting figures has been the rise of the U.S. dollar against the ruble (a 15%) during the year. This has affected revenue and earnings.

The increase in the revenue figure was mainly due to the sales price increase and the new system of tendering. EBITDA has reached 0.9 million USD, which is 18% less than the 2007 fiscal year. The margins were hurt by the dramatic increase in raw materials costs. Peat prices rose from 300 rub per m3 to 900 rub. Transportation costs rose as well due to more expensive fuel costs. Nevertheless, interest payments were lower than in 2007 due to better money management. As a result, Earnings reached 0.45 million USD and Net Earnings 0.35 million USD.

The Company won the biggest tender for 60.000 m3 of fertile soil under the new City of Moscow tender regulations and more favourable prices (1.300 rub per m3) compared to 2007. In general, 2008 has been a year of consolidation for SOIL BIOGENICS LTD as the leading compost and supercompost producer in the Russian Federation. This is creating the basis for a higher increase in Revenue and Earnings figures for 2009. The 2008 year has been a transition year between the old and new tender conditions when only 40% of the tendered volumes were awarded under the new regulations. Next year, 2009, 100% of the tenders will be managed under new rules, so selling prices and payments for deliveries will be higher and faster (about 1.700 rub per m3).

The forecast for 2009 is very positive. The Company expects to reach Revenue figures of about 14 million USD with an improvement in margins due to new selling prices. Management expects earnings to reach 2.5 million USD and reach production volumes of 250.000 m3. This forecast takes into consideration the dramatic reduction of the Moscow City budget for greenery from 300 million USD to 100 million USD in 2009 due to the financial crisis. In further years this budget should recover previous volumes.

Soil Biogenics is a biotechnology company focusing on development and production of ecological composts and soils. Soil Biogenics' stock trades under the symbol "SOBGF" on the Pink Sheets in the United States.


"Agustin Gomez de Segura"
Agustín Gomez de Segura
President, CEO and Director


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