12 May 2016
Having improved its operating and financial performance, the company demonstrated good results in last reporting quarter. With its balanced development strategy Astarta is posed well for future growth and with a large degree of certainty it can be called as one of the best Ukrainian public companies.
Total revenues of the company in Q1 2016 increased vs. corresponding period of previous year by 25% and made EUR 70.2M. As before main part of revenues (41% of total in Q1 2016) made realization of sugar, which grew by more than 30% vs. Q1 2015 (up to EUR 29M). In natural terms volume of sugar realization increased by 11% (66k tons), while average price grew by 24% up to EUR 428 per 1 ton (close to our previous estimation). Most notably, in Q1 2016 export made 17% of total sugar sales (vs. 7% in Q1 2015). As for sugar business profitability, as we estimate total cost per 1 ton of sugar in current season at not higher than EUR 300 (most likely closer to EUR 250), EBITDA margin of sugar operations can be estimated as not less than 30%. For new season total planted area of sugar beets made 45k ha, by 32% higher than in previous year, as less sugar surplus is expected on the domestic market, while deficit is projected on the world sugar market (first time in last several years), which is to be favorable for export operations development.
As for soybeans processing segment, in Q1 2016 total crushing volume made close to 60k tons of soybeans (approximately on the level of previous year), along with it sales in money terms declined vs. Q1 2016 by 21% to EUR 15M, main reasons – 1) the company shifter realization of soybean oil to Q2 2016 to profit from ongoing prices recovery; 2) decrease of average soybeans meal realization prices vs. corresponding period of previous year by 17%. In Q1 2016 Astarta kept its leading position among Ukrainian soybeans crushers with estimated (by the company market share of 17%).
In last reporting period the company significantly (by more than 2 times vs. Q1 2015, up to EUR 19M) increased its realization to 3rd parties in Farming segment, while in Dairy sales volume in money terms made EUR 6M (+10% y-o-y, notably average raw milk realization price grew by 7% up to EUR 212 per 1 ton).
Regarding general profitability, EBITDA margin in Q1 2016 made 61%, lower than in in Q1 2015, because of lower positive accounting effect on costs from UAH devaluation (though positive effect is most likely still present) and because of lower income from biological assets revaluation (more conservative approach which is seen as positive). Balance Sheet structure further improved vs. 31/12/15, as during last reporting period debt of Astarta repaid EUR 24M of its borrowings. Current financing structure is quite healthy (Debt/Equity at 0.7x, Equity exceeds Fixed Assets).