Astarta revenue rises 7%, EBITDA falls 1% in EUR in 9M14



7 листопада 2014 года
Конкорд Капитал

Астарта (AST)


Ukrainian farming and food holding Astarta (AST PW) posted a 7% yoy rise in its 9M14 revenue to EUR 278.9 mln, according to its earnings release of Nov. 7. The only contributor to the company’s revenue growth was its new soybean processing segment, which generated 20.4% of the company’s revenue in 9M14 (EUR 57.0 mln). All its other segments delivered a yoy decline, with the steepest demonstrated by its farming segment: -36% yoy to EUR 51.3 mln. The company attributed the decrease in farming revenue mostly to decreased external sales of soybeans, which are now being processed by its new plant. Astarta’s sugar segment demonstrated just a 2% yoy decline in revenue to EUR 139.6 mln, even though sugar deliveries fell 12% yoy to 235 kt.



Astarta’s 9M14 EBITDA decreased 1% yoy to EUR 101.6 mln, while its bottom line turned negative at EUR 21.5 mln (vs. positive EUR 82.4 mln in 9M13). The core contributor to its negative bottom line was EUR 89.3 mln in ForEx losses.



In 3Q14 alone, the company’s P&L was discouraging as its revenue fell 5% yoy (to EUR 90.9 mln), EBITDA turned to negative EUR 4.1 mln (vs. positive EUR 26.3 mln in 3Q13) and its bottom line was at negative EUR 25.0 mln. The key contributor to its worsened quarterly EBITDA was a negative gain from IAS-41 revaluation (EUR -17.0 mln vs. positive EUR 8.2 mln a year before), as well as ForEx losses of EUR 11.3 mln (vs. losses of EUR 0.7 mln a year before).



The company’s cash flow from operations improved 67% yoy to EUR 80.8 mln, while cash used for investing activities decreased 61% yoy to EUR 13.7 mln in 9M14. This enabled Astarta to decrease its net debt 23% YTD to EUR 213.9 mln as of end-September. Its net debt/LTM EBITDA ratio remained pretty high, in our view, at 3.2x as of end-September. The company claims to have been backed by the “strong support” of its long-term partners, like the EBRD, and it highlighted that it became the first Ukrainian non-state company to sign a loan deal with the European Investment Bank.



Alexander Paraschiy: This year, the company’s flagship segment, sugar, and its new soybean processing segment will support its P&L. Although it’s hard to predict the soybean plant’s financial results (due to its lack of a track record), we see the firm’s sugar production segment will be at least as successful as in the previous season. Firstly, competition on the domestic sugar market remains limited as Astarta’s main competitor, Ukrlandfarming, hasn’t produced any sugar this season, allowing sugar prices to remain solid in Ukraine.



Secondly, the company’s efforts to decrease its fuel costs in sugar production this season (by shifting from natural gas to coal at two sugar plants and actively using biogas at another plant) will make its output much cheaper compared to most other domestic sugar producers. All in all, we remain cautiously optimistic about Astarta’s stock price improvement in the coming year.

Источник: Конкорд Капитал



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