4 November 2023

In the third quarter of 2023, Ovostar reduced egg exports both versus the previous two quarters and the corresponding period of 2022.

	Q3 2023	Q2 2023	Q3 2022
Eggs output, mln	416	370	396
Shell eggs sales, mln	256	237	283
Shell eggs export, mln	72	103	95
Domestic eggs sales, mln	184	134	188
Eggs processing, mln	141	121	123

Ovostar, one of the largest Ukrainian egg producers, has published its operating report for the third quarter and first nine months of 2023.

According to the report, the total flock of the company continues to increase vs. previous reporting periods and as of the end of September comprised 7.42 million heads.

As a reminder Ovostar total flock figure reached its maximum value - 8.4 million heads - at the end of 2021 and significantly decreased during the first half of 2022 (to 6.26 million heads). Therefore, the company is currently continuing to rebuild the flock.

In the reporting quarter, Ovostar produced 416 million eggs, which is the highest value since the second quarter of 2022. Compared to the previous quarter, egg production increased by 9%.

In 9m 2023, the total production of eggs by the company amounted to 1,148 million pieces, 3.5% lower y-o-y.

Regarding the sale of shell eggs, there were several important changes in the third quarter compared to previous periods.

The export of shell eggs decreased vs. the previous two quarters and amounted to 72 million pieces (for comparison, in the second quarter of the current year – 103 million pieces). It should be noted that the average price of egg exports from Ukraine in August reached the lowest level in recent months, while the overall decrease since the beginning of the year was more than 40%. Not surprisingly, Ovostar reacted to this situation by decrease of export supplies.

Sales of shell eggs on the domestic market, on the other hand, increased significantly - from 134 million pieces in the previous quarter to 184 million pieces. This shift in focus to the domestic market restrains Ukrainian domestic shell eggs prices from seasonal growth (current domestic prices are lower compared to October-November 2022).

The average selling price of shell eggs in Ovostar decreased by 22% q-o-q, and by 36% compared to the first quarter of 2023.

At the same time, despite the decrease in sales prices, we expect that the reporting period will still be quite profitable for the company, primarily due to the decrease in domestic prices for grain and oilseeds (which are the main components of the net cost of eggs produced) in Ukraine.

Our analysis of the financial report of the Ovostar company for the first half of 2023 can be found at the link.