Page 69 - UKRRptJul19

JKX Ukraine hydrocarbon output reaches record high in May. Poltava Oil and Gas Company, the Ukrainian subsidiary of JKX Oil & Gas (JKX LN), produced 22.1 mcm of natural gas (up 74% yoy) and 3.5 kt of oil and condensate (up 8% yoy) in May, according to information provided by the Energy Ministry. In 5M19, the company produced 99.6 mcm of natural gas (up 66% yoy) and 16.4 kt of oil and condensate (up 14% yoy). Based on the Ministry’s data, Concord estimates that JKX’s total hydrocarbon output in Ukraine reached 5,480 boepd in May, which is 51% more yoy and 8% more compared to April. This is a record high level for the company’s Ukrainian asset. In 5M19, the company’s output in Ukraine reached 5,130 boepd, which is 48% more yoy. May’s statistics confirm JKX’s recent successful drilling is paying off and suggest the company will show exceptionally strong production results in 1H19. That said, we see JKX shares having value growth potential. We note that its alleged outstanding tax debt in Ukraine – which the company is challenging in the courts – remains a key risk.
Smart-Holding, controlled by Ukrainian businessman Vadim Novinsky, increased its stake in the gas and oil E&P company Regal Petroleum to 82.65% from 54.00%, the holding reported on June 21. The transaction involved Smart-Holding’s subsidiary, Pelidona Services, purchasing the entire Regal stake in Kylestone Limited, a company controlled by another Ukrainian businessman, Victor Pinchuk, Interfax-Ukraine reported. Commenting on the deal, Smart-Holding reported that it won’t affect neither Regal’s corporate governance nor its status of a publicly listed company. Pelidona is also not intending to continue any purchase of Regal shares on the market, the holding said. “Regal Petroleum is demonstrating good production results and will continue to remain the basis of the gas production direction of Smart-Holding,” its press release said.
9.2.4 Construction & Real estate corporate news
9.2.6 Agriculture corporate news
Dragon Capital’s Ukraine real estate fund earned a net profit of $3.17mn last year, turning around a 2017 net loss of $4.85mn. According to a filing on the London Stock Exchange, net asset value fell by 15%, to $36.2mn, due to a distribution of $9.8mn to shareholders of the Ukrainian Real Estate Investment Fund Dragon Ukrainian Properties and Development Plc. Dragon Capital Investments owns 61% of the fund.
● MHP
Ebitda at Ukraine's largest poultry producer MHP slid by 6.9% year-on- year to $83mn in January-March, according to its financial statements published on June 12. The company’s key segment, poultry meat, generated $77mn of Ebitda in the first quarter of 2019, or 6.5% less y/y. Its Ebitda per unit of poultry meat dropped 35% y/y to $0.36/kg. Its grain-growing operations Ebitda swelled 83% y/y to $11mn, while its meat-processing segment Ebitda fell 25% y/y to $6mn. The results excluded its newly acquired assets. The company’s revenue advanced 42.8% y/y to $436.3mn, while the recently acquired Perutnina Ptuj plant contributed $25.7mn to total revenue. Andriy Perederey at Kyiv-based brokerage Concorde Capital wrote in a note on June 12 that the driver for MHP’s Ebitda drop was mainly its poultry meat segment, which suffered from higher production and delivery costs. On the other hand,
69 UKRAINE Country Report July 2019 www.intellinews.com