Ovostar reports strong 1H15 results

Ovostar reports strong 1H15 results



31 серпня 2015 года
Конкорд Капитал

Ovostar Union (OVO)


Ukrainian egg producer Ovostar Union (OVO PW) posted a 2% yoy decline in net revenue in 1H15, according to its Aug. 28 earnings report. The key reason for the decline was reduced activity in the company’s third segment, sunflower oil sales, where volumes fell by half. Revenue in its core segment, shell eggs, increased 8% yoy to USD 24.6 mln, mainly caused by 41% yoy increase in volume of eggs sold to 421 mln units. Its average egg price surged 71% yoy in the local currency to UAH 1.20/unit, while in U.S. dollar terms it declined 21% yoy. The company boosted shell egg exports 2.3x yoy to 98 mln units, and domestic sales by 26% yoy to 323 mln units. Its laying hen flock increased 13% yoy to 4.63 mln.

Ovostar’s EBITDA advanced 18% yoy to USD 15.9 mln and its bottom line rose 42% yoy to USD 15.9 mln. Its net debt remained nearly flat at USD 6.3 mln and net debt-to-EBITDA ratio remained one of the smallest in the Ukrainian equity universe at 0.4x.

Alexander Paraschiy: Ovostar’s results are a deep contrast to what its bigger peer, Avangardco, reported the same day (namely a 47% yoy drop in its laying hen flock, 29% yoy decline in shell egg volume sales, and negative EBITDA and bottom line). Ovostar’s approach to develop cautiously, while using mostly shareholder funds, has proved its efficiency, especially in times of macro shocks in Ukraine. We expect the company’s P&L will slightly worsen in 2H15, as we expect accelerated inflation of some inputs, while we maintain our view of Ovostar as one of our top picks among Ukrainian equities.

Источник: Конкорд Капитал

Аналитик: Александр Паращий
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