Page 64 - UKRRptFeb20

in the fourth quarter, which was 29% more y/y. The crops’ average price decreased 12% y/y and 3% q/q. Its volume of soybean oil sales fell 34% y/y to 10.6 tonnes, while volume of soybean meal sold advanced 32% y/y to 44.8 tonnes. Its milk sales dropped 11% y/y to 21.9 tonnes, while the milk price increased 8% y/y and 9% q/q to UAH10.3/kg. Based on its quarterly results, Concorde Capital calculates that Astarta sold 300.7 tonnes of sugar in 2019 (8% less y/y) at an average price of UAH10.0/kg (-5% y/y). Its total sales of three key crops surged 62% y/y to 1,145 tonnes in 2019, while their average price slid 12% y/y in UAH terms.
● MHP
Ukraine’s poultry exports to the EU were stopped due to the confirmation of the presence of the highly pathogenic H5 type avian influenza ​in Vinnytsia region, leading poultry producer​ ​MHP​ announced on January 23. The bird disease was detected at two enterprises located in Buhakiv village, Nemyriv district, Vinnytsia region on January 19. The Ukrainian veterinary authorities reported it took all necessary measures to localize and prevent the spread of avian influenza. The outbreak has not affected MHP facilities, some of, which are located in the same Vinnytsia region of Ukraine. The company is undertaking all necessary measures to prevent potential outbreaks at MHP’s units. MHP’s facilities based in Vinnytsia region account for 55% of its total capacity of poultry meat production.
Ukrainian farmer and leading poultry producer​ ​MHP​ has warned its 2019 EBITDA will be “some 15% lower” than its guidance of $450mn ​in its trading update released on January 30. The company attributed such results to weaker grain-growing profits due to the strengthening of the Ukrainian currency in 4Q19, a drop in export chicken prices in 4Q19, weaker crop prices, as well as reduced chicken exports in 4Q19 due to a ban imposed by Saudi Arabia. The company’s estimates imply its 2019 EBIDA is 15% lower y/y and its 4Q19 EBITDA is about 70% lower y/y.​ ​​ ​The company reported its end-2019 net debt stood at $1,143mn (or 3.0x of its 2019 EBITDA) and its cash balance was $300mn. Due to weak annual results, the company expects that this year it will pay less dividends (in 2016-2019, it paid annually $80mn). ​ ​​ ​MHP reported it produced 728.9 kt of poultry meat in Ukraine (up 18% y/y) and sold 670.0 kt of meat (up 13% y/y) in 2019. Its export sales increased 25% y/y to 357.4 kt, which the company characterized as a 5% underperformance due to Saudi Arabia's ban imposed in September. Saudi Arabia has reopened its market for part of MHP’s chicken as of January 29, the company said.
9.2.7​ TMT corporate news
Snapchat has acquired Ukrainian startup AI Factory for $166mn, ​reports AIN.UA. AI Factory was founded 18 months ago by Viktor Shaburov, whose previous startup, Looksery, also was acquired by Snap Inc. for $150mn in 2015. With offices in Kyiv, Zaporizhia and San Francisco, AI Factory employs 70 people. The company developed a new feature for Snap: editing a user’s photo to turn it into a video. The feature was launched Dec. 18. Days later, Snap bought out other shareholders in AI Factory.
Nova Poshta, the private package delivery service, plans to invest $100mn this year​, largely to upgrade sorting facilities, to develop mobile apps and to buy scooters, pickups, minibuses and intercity containers. Kyiv’s new
64​ UKRAINE Country Report​ February 2020 ​ ​www.intellinews.com