Greenhouse Holding LLC operates through two subsidiaries: Georgian Greenhouse Corporation JSC and Georgian Agrohouse LLC. Georgian Greenhouse Corporation manages a 12-hectare agro-greenhouse complex planting mainly tomatoes and cucumbers. Georgian Agro House is engaged in the products packaging and distribution. The products are mainly sold under the Planta brand.
"Herbia" LLC is a 3-hectare greenhouse, where the company grows, packs and distributes herbs and vegetables.
"The operating profit margin in greenhouses of the two companies is within 5%-15%, and the EBITDA margin is 15%-20%. Given the specifics of the sector, both companies have problems with working capital management. Companies have to pay suppliers at once, but they have to wait a long time to get money from retailers.
According to financial data for 2023, Planta's revenue was 23 million GEL. Over the past 5 years (2018-23), the company grew by an average of 10% per year, but in 2023, the company's revenue declined by 9%.
Herbia's turnover stood at 11 million GEL that is 2 times less than that of the leading vegetable greenhouse. Herbia's growth rate was much higher. In 2018-2023, the company grew by an average of 19%. In 2023, Herbia's revenue also decreased by 8%. Herbia's gross profit margin stood at 69%.
"Planta" and "Herbia" spend 30% and 15% of their income on salaries, respectively. Relatively high wage costs of "Planta" is caused by the relatively low operating profit margin of the company.
The operating profit margin of "Planta" is 5%, "Herbias" hits 15%. In terms of EBITDA margins, "Planta" sees 15%, "Herbia" - 20%.
Herbia is a much more leveraged company than Planta. In recent years, Planta has used most of its free cash flow to cover its debt, so by 2023, its debt to assets ratio was 10% while Herbia’s - 59%, as the company took out additional debt to service the debt and pay dividends.
In the last three years (2021-23), "Herbia" paid out a total of ₾4.5 million to its owners, which was mostly financed by borrowed loans. In the last six years (2018-23), the company gave a total of ₾5.7 million in dividends. "Planta" did not issue a dividend," Finspot's review reads.
