30 March 2016
Focusing on operating efficiency and costs optimization, the company demonstrated sound operating and financial performance in Y2015. Being prudent and accurate in its development during last years, despite negative impact of UAH devaluation, the company maintains its solid balance sheet structure.
Following foreign currency denominated prices decline, total revenues of Astarta in Y2015 decreased vs. corresponding period of previous year by 11% (to EUR 314.0M). Though the share of export in total proceeds has been growing (36% in Y2015), main portion of revenues is still nominated in UAH and has low linkage to foreign currency.
Notably because of Ukrainian market specificity (minor export/import volumes because of different restrictions, both domestic and international) internal sugar prices growth was not in line with UAH devaluation, so that despite increase of realization in natural terms by 11% (up to 363kmt), revenues from sugar sales declined by 3.4% vs. previous year (to EUR 151.5M). Astarta keeps its position as clear market leader with 25% share (generally market share of TOP-3 leading producers during last years increased at account of smaller ones). Reported EBITDA margin of the segment has been at 38% is seen as not much sustainable because of accounting effect of UAH devaluation, along with it, with high yields for both sugar beets growing and sugar production, being rather efficient from energy cost point of view, we see Astarta as clear market cost leader, which provides for its excellent market position.
Mainly because of involvement into tolling operations (37% of total processing volume in Y2015) and due to general world price decline, volume of soybeans processing products realization declined from EUR 74M to EUR 51M. EBITDA margin of these operations also decreased – from 26% to 20% (basing on our estimations, because of increased competition).
Despite negative general situation on Ukrainian dairy market (main reasons – UAH devaluation and weak world market prices), Astarta still keeps its activity profitable in this segment (unlike less efficient producers). Despite some decline in headcount, raw milk production has been approximately stable vs. previous year (103k tons). Total realization volume in this segment made EUR 24M (vs. EUR 29.5M in Y2014), EBITDA margin – 9% (with potential additional positive effect for other directions).
Farming operations division showed good results in Y2015, as yields were better vs. previous year, while production costs per 1 ha declined approximately in line with grains realization prices. Farming direction remains main EBITDA contributor for Astarta (EUR 70.7M, 54% of total EBITDA in Y2015).
As of 31/12/15 BS structure improved vs. 31/12/14, as during the year debt of Astarta decreased by close to EUR 50M. Debt/Equity ratio has been at 0.85x as of 31/12/15.