Page 70 - UKRRptDec19

Ovostar EBITDA plunges 66% y/y in 9M19. ​Revenue at Ukraine’s egg producer Ovostar Union (OVO PW) fell 18.0% y/y to $77.6mn in 9M19, according to the company’s interim report published on November 14. The company’s EBITDA plunged 65.8% y/y to $5.9mn and net profit crashed 81.2% y/y to $2.6mn in 9M19. Its operating cash flow before working capital changes plummeted 58.0% y/y to $8.9mn, while net cash generated from operations decreased 22.7% y/y to $13.6mn. The company’s investments into fixed assets and biological assets slightly increased by 6.4% y/y to $18.2mn. Also, the company’s reduced its cash balance by 59.0% ytd to $5.9mn of end-9M19. The company’s shell egg sales fell 15.9% y/y to 888mn units in 9M19 and its egg export volume slid 0.7% y/y to 440mn units, while its export sales share was 49.5% in 9M19 vs. 42.0% a year ago. Average shell egg prices declined 9.0% y/y to $0.061/unit in 9M19. Ovostar sold 1,736 tons of dry egg products (19.5% y/y decline) and its export sales decreased 21.4% y/y to 1,235 tons in 9M19. The company’s sales of liquid egg products rose 17.9% y/y to 10,453 tons and export sales climbed 17.2% y/y to 5,069 tons in 9M19. The average selling price of its dry egg products dropped 9.7% y/y to $4.39/kg and the average selling price of its liquid egg products decreased 3.4% y/y to $1.41/kg. In 3Q19 alone, the company’s shell egg sales dropped 26.3% y/y to 278mn units, while its export sales declined 29.5% y/y to 105mn units and domestic sales fell 24.1% y/y to 173mn units.
Dairy firm​ M​ ilkiland​ reported a drop in its 9M19 revenue by 2.3% y/y to €96.6mn​, according to its interim results published on November 15. Its EBITDA plunged 85% y/y to €0.7mn, which is mostly the result of plummeting profits in Russia (by 85% y/y to €0.6mn) and increased operating losses in Poland (up 23x y/y to €1.2mn). Milkiland EBITDA for the last 12 months turned negative at €1.7mn. The company attributed its weak results to higher raw material costs (raw milk), increased competition at the Russian dairy market and unfavourable output prices in Poland. Milkiland’s net losses decreased 15% y/y to €11.4mn in 9M19. Its total debt slid 2% y/y to €84.3mn and net debt declined 5% y/y to €81.2mn. Alexander Paraschiy: With such results, the company has no chance to survive. All the attempts to change Milkiland’s strategy over the last five years have proven to be unproductive.
9.2.7​ TMT corporate news
Russian MTS sells Ukraine mobile operator to Bakcell. ​Russian leading telecom company MTS (MTSS RX, MBT US) reported on Nov. 25 that it has agreed to sell its Ukrainian subsidiary VF-Ukraine for a cash consideration of USD 734 mln and total EV of USD 848 mln. The buyer is Bakcell, an Azerbaijani telecom operator. MTS said its board is going to distribute part of its cash proceeds from the deal, about USD 413 mln, into special dividends. MTS acquired 100% of the shares in the Ukrainian mobile operator in 2003-2014, paying total cash consideration of USD 378 mln. The operator had a 1.8 mln customer base at the time of purchase, which has since risen to 19.8 mln as of end-September 2019.Azerbaijan’s Bakcell, which is buying Vodafone Ukraine, plans to invest $400mn in the mobile phone company, Davyd Arakhamia, secretary of the National Investment Council, writes on Facebook. “The new owners have already committed $400mn for development in Ukraine,” he writes. “Plus, the holding is considering a number of investment projects in the country.” Arakhamia, who also heads the majority Servant of the People faction in the Rada, adds, referring to MTS, the Russian seller: “A passive investor looking for exit has been replaced by an active one looking for
70​ UKRAINE Country Report​ December 201 ​ ​www.intellinews.com