Avangardco boosts profit 4% in 2013, to pay USD 0.93/DR in dividends

Europe’s leading egg producer Avangardco (AVGR LI, AVINPU) boosted its net revenue 5.1% yoy to USD 661 mln in 2013, according to a company statement released on April 11. Its EBITDA increased 7.6% yoy to USD 301.2 mln and net income improved 4.3% yoy to USD 238.1 mln. Avangardco’s management confirmed its plan to pay 25% of its profit in dividends this year, with the payment to be approved at its next shareholder meeting.



The company’s total debt decreased 5.5% yoy to USD 332.8 mln, and its total debt/EBITDA ratio improved to 1.1x as of end-2013 from 1.3x a year before, remaining significantly below the Eurobond covenant (3.0x).



In 2014, the company plans to further increase its capacity load at its newly constructed factories, Avis and Chornobaivske, as well as increase the production capacity of its egg processing plant. The company expects some moderate growth in the prices of its products in 2014.



Avangardco has scheduled a conference call for investors and analysts for today, 16:00 Kyiv time.



Alexander Paraschiy: The company’s reported revenue and EBITDA for 2013 are fully in line with our previous estimates (USD 660 mln and USD 298 mln, respectively), while the reported bottom line is 5% below our estimate. The company’s earnings per DR amounted to USD 3.73, implying that it will pay USD 0.93 per DR in dividends this year, promising a 9.8% dividend yield.



We believe Avangardco, which trades today at 2.6 x EV/EBITDA, will have good prospects in 2014. Food inflation in Ukraine and the devaluation of the local currency will positively affect the company’s profitability this year, while an expected increase in output of eggs and egg products should result in a positive scale effect.



Moreover, the completion of large investment projects suggests the company’s CapEx in the current year will decrease significantly. Thus, the company’s free cash flow generation will improve, which enables us to assume that the company will increase its dividend payout in 2015.

Источник: Конкорд Капитал