10 November 2022
Astarta financial performance in Q3 2022 was quite good, main reasons – growing volumes and profitability of soybeans processing and stable sugar segment performance.
In reporting quarter Astarta revenues made EUR 123M vs. EUR 150M a year ago. Main reason of it is significant decrease of new wheat crop sales.
If in Y2021 Astarta sold main part of harvested winter wheat crop (237k tons) almost right after the harvesting, this year because of difficulties with logistics chains it did not have such possibility, so only 53k tons was sold (and remaining wheat is on stock).
In Q3 the company decreased its sugar sales y-o-y by 25% (because of high last year’s base, as sales in Q3 2022 were high vs. both Q1 and Q2), along with it, EBITDA of sugar segment comprised EUR 14M (vs. EUR 12M in Q3 2021), so segment’s profitability increased.
Results in soybeans processing significantly improved. Volumes more than doubled y-o-y, while EBITDA made EUR 10M (vs. zero profitability last year). The company also managed to do seasonal soybeans crushing plant maintenance in August in line with the schedule.
Main reason of performance improvement was decrease of domestic soybeans prices in Ukraine. On its turn Astarta managed to re-direct soybean oil and meal export flows to European countries through new logistics routes mainly by railway.
In reporting period operating cash flow of the company was close to zero, so revenues were sufficient to cover current expenses of the company (mainly early grains and oilseeds harvesting). Along with it Astarta increased its debt (which is in general not high, so the company definitely had a room to increase it) by EUR 24M, increasing in parallel its cash by EUR 15M.
In such a way the company secures its peak need for working capital financing for the period of late crops harvesting and sugar production.
As for the whole 9m 2022 period, Astarta financial results have been quite good, especially taking into account current situation in Ukraine. Revenues increased y-o-y by 13% to EUR 341M (due to active corn sales in the beginning of the year and growth of soybeans crush). EBITDA made EUR 130M (vs. EUR 158M a year ago), operating cash flow comprised EUR 3M (in addition EUR 24M were directed for operating lease payments).
The company increased its debt by EUR 77M, along with it cash balance grew from EUR 10M to EUR 48M, so net debt increased by about EUR 40M.
Our expectations regarding future Astarta performance are quite positive (of course assuming general situation in Ukraine will not worsen). Taking into account general trend on Ukrainian sugar market (expected production this year is almost equal to projected consumption, while there are some export opportunities to EU), we expect stable results in sugar segment.
As Ukraine is to have quite good soybeans crop this year, soybeans processing results should also be quite good.
On the other hand grains growing segment performance will depend on operating of grains corridor out of Ukrainian deep sea port. Anyway Astarta has quite good storage facilities to provide for longer grains storage and gradual re-routing of grains flows to new export destinations in case situation with corridor will worsen. Grains and oilseeds yields are quite normal this year, while global grains prices remain on rather high levels.