Ovostar increases revenue, profit 1.3x yoy in 2013

Ukrainian egg producer Ovostar (OVO PW) reported a 35% yoy increase in net revenue to USD 81.3 mln in 2013, according to annual report released on April 30. The growth was fuelled mainly by higher sales in the company’s core segment, Shell Eggs (+39% yoy to USD 53.6 mln) as it sold 585 mln eggs, or 31% more yoy. Sales in the company’s Egg Products segment increased 28% yoy to USD 22.6 mln, mostly due to a 35% yoy increase of deliveries of liquid egg products.

The company’s EBITDA improved 33% yoy to USD 36.2 mln, as higher product prices fully offset an increase in production costs. The net profit of Ovostar increased 30% yoy to USD 31.2 mln in 2013. The company remained nearly unleveraged with its net debt increasing by USD 1.6 mln yoy to USD 4.9 mln as of end-2013.

The company has slightly downgraded its capex appetites citing increased political uncertainty, and slightly downgraded its production plans for 2014, compared to what Ovostar had predicted a year before. Its egg production plan for 2014 has been corrected to 1.10-1.20 bln eggs (up 23%-34% yoy), which is 4% below the production plan (1.15-1.25 bln eggs) presented in the company’s 2012 annual report.

Alexander Paraschiy: Thanks to the company’s strategy of gradual expansion of its capacities, Ovostar is one of the best performing companies in terms of P&L growth in the Ukrainian investment universe, and we expect it will remain so in the year 2014.

At the same time, we have to admit that the company’s production result in 2013 failed to meet the management’s expatiations. The production of shell eggs (893 mln units) and the amount of eggs processed fell below its annual plans (900-1000 mln units and 580-650 mln units, correspondingly). Also, sales of shell eggs (585 mln units) were close to the lower limits of the company’s 2013 projections (580-650 mln units). Therefore, we expect the company’s 2014 results will be closer to its lower end of operating projections as well.

Источник: Конкорд Капитал