Avangardco laying hens flock shrinks 16% YTD as of end-1H14

Avangardco laying hens flock shrinks 16% YTD as of end-1H14



8 серпня 2014 года
Конкорд Капитал

Авангард (AVGR)


Europe’s leading egg producer Avangardco (AVGR LN, AVINPU) reported its flock of laying hens amounted to 22.8 mln as of end-1H14, a 16% decrease YTD, according to its operating update released on Aug. 8. The company attributed the decline to its decision not to renew its flock in the war-afflicted Donetsk and Luhansk regions (where its laying hens flock has been halved YTD to 3.0 mln, we estimate), as well as the closure of its Crimean factory.



As the laying hens flock was, on average, higher yoy in 1H14, Avangardco was able to increase its egg production 9% yoy to 3.68 bln units for the period. It sold 4% less shell eggs in 1H14 (2.40 bln), and sold 7% less yoy on the Ukrainian market. At the same time, Avangardco directed more shell eggs for processing (up 67% yoy to 1.20 bln units) and boosted sales of egg products 60% yoy. The company reported its average shell egg price was UAH 0.68/unit, 8% higher yoy in local currency terms in 1H14. The average price for egg products fell 10% yoy to USD 6.9/kg.



Alexander Paraschiy: The company’s information on shell egg sales looks encouraging: sales declined only 4% yoy in both 1Q14 and 2Q14, despite the market for its eggs having decreased as about 20% of its traditional customers are in Crimea and the war-afflicted Donetsk and Luhansk regions. At the same time, a sign of concern is its falling laying hens flock, despite the company having increased the hen count at its new factories.



In particular, we estimate that the company’s total laying hens flock outside Crimea and Donbas fell 1% YTD. With such an egg production capacity trend, Avangardco’s total egg production may fall in 2H14 and in the full year, which will be a clearly negative development for the company.

Источник: Конкорд Капитал

Аналитик: Александр Паращий
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