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1 it has purchased 130 grain railcars as part of an initiative to build its own fleet . The company expects to purchase another 70 railcars in March with the goal of its new fleet helping to optimize grain logistics, particularly in times of peak demand for railcars in Ukraine. In other news, Interfax-Ukraine reported that Ukraine’s Cabinet approved on February 28 a state program of support for farming companies, according to, which farmers can receive state compensation of up to 25% of the cost of grain railcars they purchase. “The acquisition of railcars by large farming companies has become a market trend prompted by a deficit of railcars in the country and rising prices for their rent. State deregulation of daily use rates in January 2018 has prompted state monopoly Ukrainian Railway to hike rents several times. Recall, two weeks ago, Ukrainian farmer Kernel also announced the purchase of a logistics company operating almost 3,000 railcars,” Alexander Paraschiy of Concorde Capital said in a note. “We estimate the payback period for Astarta’s new railcars of about four years, and this can turn out to be even less if the company secures state compensation, such as what the Cabinet approved. We assess these acquisitions to be value-creative for both Kernel and Astarta.”
● MHP
Ukraine's largest poultry producer MHP reported a 20.8% year-on-year jump in revenue to $1,556mn and a 2% y/y slide in Ebitda to $450mn in 2018, according to its March 20 financial report. The company’s net income plunged 44.4% to $128.1mn in 2018. MHP’s operating cash flow before working capital changes decreased 4.9% y/y to $413mn, but cash flow from operations (before profit tax and interest) rose 17% y/y to $368mn due to smaller cash outflow for working capital. The company’s total debt advanced 30.2% y/y to $1,343mn as of end-2018 and its net-debt-to-Ebitda ratio worsened to 2.51x (vs. 2.25 a year ago). MHP’s poultry meat segment generated $1,241mn in revenue, or a 18.1% y/y increase. The segment’s Ebitda declined 15.3% y/y to $311mn, while Ebitda per kg of poultry meat dropped 17.2% y/y to $0.53 in 2018. The company’s farming segment generated $151mn in total Ebitda (58.9% y/y growth), while its meat-processing segment’s Ebitda decreased 15.8% y/y to $16mn in 2018. The company offered new information on the capacity of its newly acquired Slovenia-based producer Perutnina Ptuj , which it reported to be about 55 tonnes of poultry meat and 35 tonnes of value-added meat per year. MHP also reported making a prepayment of €20mn ($23.8mn) before the year end of 2018. The deal was financed by cash from operations and a bank loan in the amount of €100mn. MHP plans to use the new asset to develop positions in the EU market and is going to increase its capacity over next three to five years. Andriy Perederey at Kyiv-based brokerage Concorde Capital believes that the company’s Ebitda declined due to reduced government grants and higher SG&A expenses. Most government grants received by the company were related to capex, not operations, and didn’t affect 2018 Ebitda. MHP received $34.4mn of grants in 2018, according to its compensation programme for the construction and reconstruction of livestock farms, while the company received $52.6mn in state support in 2017. Without grants, the company’s Ebitda was $449mn in 2018 vs. $406mn in 2017 (or 10.4% y/y higher).
● Other
51 UKRAINE Country Report April 2019 www.intellinews.com