Astarta's Q4 trading report - our analysis

27 January 2024

In the last quarter of 2023, Astarta significantly increased the sales of grains and oilseeds, while the volume of sugar sales remains stable.

Sales volumes, tons Q4 2023 Q3 2023 Q4 2022
Sugar 80 90883 19062 051
Wheat 284 81722 410135 192
Corn 174 30232 74482 030
Sunflower seeds 54 6043 33723 345
Soybean oil 10 3789 46310 698
Soybean meal 45 39929 65536 757
Milk 27 85525 70226 455

In the fourth quarter of 2023, Astarta's sugar sales remained close to the highest for the recent years level. In anticipation of significant sugar production volumes in the new 2023/24 season, as well as taking advantage of the favorable situation on the global and European markets, the company is trying to maintain high sugar sales rates.

So in Q4 2023 Astarta sold almost 81,000 tons of sugar, which is almost the same as in the previous quarter and 30% more than in the fourth quarter of 2022.

The average sales price decreased by 5% y-o-y in hryvnias, and -9% q-o-q.

Despite the price decrease, due to the record sugar beet yield and the significant volume of sugar production in the new season (in the end of the day the total volume of production made 377,000 tons), according to our expectations, Astarta should maintain segments profitability compared to previous reportinh periods (as a reminder in 9m 2023, the EBITDA of Astarta's sugar division amounted to EUR 35 million).

Astarta sugar sales Q4 2023

Taking advantage of the opportunity to export grain through the deep-sea ports of Odessa, Astarta significantly increased the volume of grain sales - in the current quarter, the company sold 284,000 tons of wheat and 174,000 tons of corn (a year ago - with the working grain corridor in the "old" format in frames of the deal brokered by the UN and Turkey - Astarta sold 135,000 tons of wheat and 82,000 tons of corn).

Also, the company more than doubled (compared to the previous year) the sales volume of rapeseed and sunflower, but the sale prices of grain and oilseed crops were significantly lower y-o-y.

In the soybean processing segment, everything looks relatively stable - more than 10,000 tons of soybean oil and 45,000 tons of soybean meal were sold in Q4 2023. Raw milk sales also look relatively stable (nearly 28,000 tons were sold in the reporting quarter, with a significant increase in sales price both year-over-year and q-o-q).

In the current season, Astarta is obviously betting on the processing and output of a higher added value products (sugar, milk, soybean processing), and the company is also much more active in grains trading. Despite the relatively low prices for grains and oilseeds in the current season, thanks to good operating figures (including high yields of the main crops), we expect quite good financial results of the company in Q4 and Y2023 as a whole.

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