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6.1 tonnes per ha (a 1.7% y/y increase) and rapeseed yields at 3.2 tonnes per ha (a drop of 3.0% y/y). Andriy Perederey at Kyiv-based brokerage Concorde Capita; believes that the surge in MHP’s poultry sales and high crop yields will be the key drivers of its revenue growth in 2018. "But we see that the company’s poultry segment Ebitda in 2018 will be lower yoy due to higher selling costs, which support export sales growth," he wrote in a note on October 18. "So we expect that MHP’s poultry segment Ebitda will be in the range of $320mn-$330mn in 2018 vs. $367mn in 2017, but the y/y decrease will be offset by better results of its grain segment (based on the company’s estimates about bumper crop yields)." Concorde believes that the company will have the ability to generate total Ebitda of $470mn-$480mn in 2018 (up from $452mn in 2017).
Ukrainian egg producer Ovostar Union decreased shell egg output by 3.4% year-on-year to 1,202mn units in January-September , according to October 25 operating update. The company’s total hen flock fell 7.6% y/y to 7.3mn heads and laying hen flock slid 4.4% y/y to 6.5mn at the end of January-September. Ovostar's shell egg sales increased 27.4% y/y to 1,056mn units in the same period, and its egg export volume rose 26.6% y/y to 443mn units. Its average shell egg prices advanced 35% y/y to UAH1.79 per unit in January-September. The company processed 401mn eggs and sold 8,867 tonnes of liquid egg products (a 47% y/y growth), while its export sales jumped 77% y/y to 4,325 tonnes. The company’s sales of dry egg product increased 3.9% y/y to 2,157 tonnes, while export volumes improved 11.7% y/y to 1,572 tonnes in January-September. In July-September, the company’s egg production increased 3.5% quarter-on-quarter to 415mn units, while shell egg sales climbed 11.9% q/q to 377mn units. The company’s shell egg export decreased 4.5% q/q to 149mn units, while domestic sales improved 26.0% q/q to 228mn units. The average price of shell eggs was UAH1.67 per unit in the third quarter 2018, which was 0.9% higher q/q. Andriy Perederey at Kyiv-based brokerage Concorde Capital wrote in a note on October 26 that the company’s egg sales increase was driven mainly by boosted domestic sales in July-September, and the share of domestic sales was 60% vs. 54% in the second quarter of 2018.
Ukrainian sunflower oil producer Kernel is going to secure a long-term credit financing of up to $250mn from the European Investment Bank (EIB) with the aim of covering capital expenses in the 2019 financial year (began on July 1, 2018). The total cost of the project is up to $519mn, according to the EIB. The project consists of the financing of two inland grain silos, a grain handling and storage terminal located within the Port of Chornomorsk, five biomass-fired combined heat and power plants (CHPs) and one sunflower oil crushing plant, in different locations in Ukraine, Interfax news agency reported on October 25. EIB funds are expected to enable the company to improve trade and export logistics by constructing new grain silos (accessible also to third parties) and transhipment facilities. It will directly support the upgrade of agricultural facilities and contribute to aligning with the EU standards in the country, according to the EIB. Through the construction of a new greenfield sunflower oilseed production plant, which is expected to incorporate best available technology, the company should be able to be more resource efficient, consolidate its competitive position and, therefore, increase its market share both in Ukraine and in the EU.
The European Bank for Reconstruction and Development (EBRD) will provide a senior long-term loan of up to €15mn to I&U Group , a vertically
70 UKRAINE Country Report November 2018 www.intellinews.com