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UPDATE 1-Ukraine drought to hit AgroGeneration crop production

* Farm operator expects sunseed yield losses from drought

* Total output may fall from 2016 despite good wheat crop

* Core H1 profits rise, firm sees grain price recovery
(Adds detail)

PARIS, Oct 6 (Reuters) - Farm operator AgroGeneration
said on Friday that summer drought in eastern Ukraine
will affect its sunflower seed harvest and could push its
overall production down this year despite a bumper wheat crop.

The Paris-listed firm, which farms just over 100,000
hectares in Ukraine, has observed a "significant" hit to yields
of sunflower seed, or sunseed, already harvested in the east,
Vice Chairman Pierre Danon told Reuters.

He declined to give a precise figure.

The company was waiting for harvesting of sunseed and other
summer crops like maize to progress further west to assess its
overall production prospects, he said, adding that maize should
have suffered less than sunseed because it received more rain.

AgroGeneration produced about 390,000 tonnes of crops last
year and said in a first-half results statement on Friday that
the summer drought could affect its target of reaching a similar
volume this year.

Ukraine is one of the world's largest producers and
exporters of cereals and oilseeds, and AgroGeneration is among
the foreign investors to have targetted the country's fertile
farmland, despite political and economic upheaval.

The firm still had an objective to double the amount of
hectares it farms in Ukraine but was being cautious about its
pace of expansion due to difficulties in securing land leases,
Danon said.

Earlier this year the company sold a 3,800 hectare farm near
Kharkiv, partly motivated by a wish to be less weighted towards
the east and its drier climate, and hopes to have replaced most
of this area by the year-end through deals further west, Danon

Core profits were supported by a slight improvement in grain
prices and Danon said AgroGeneration expected to benefit from a
steady increase in prices in coming years following a downturn
in grain markets since 2013.

An exchange rate effect linked to the farmland sale in the
east weighed on its first-half results, with AgroGeneration
reporting a 305,000 euro ($351,000) net loss compared with a
233,000 euro profit a year earlier.

But core earnings before interest, tax, depreciation and
amortisation (EBITDA) rose to 5.95 million euros from 5.80
million euros.
($1 = 0.8540 euros)
(Reporting by Gus Trompiz; Editing by Bate Felix and Alexander

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