20 March 2017
According to preliminary data of the company its revenues in Y2016 slightly grew vs. previous year and made USD 78M. Despite generally negative situation on Ukrainian eggs market, the company keeps showing decent profitability – in Y2016 EBITDA margin made 30%.
As we expected with growth of Ukrainian eggs retail price starting from October financial performance of Ovostar improved – if in Q3 2016 EBITDA of the company made just USD 3.6M with margin of 19%, in last quarter of the year it increased up to USD 9.2M (38%). As a result total Ovostar EBITDA in Y2016 made close to USD 23M vs. USD 34.8M a year ago. Main reasons of decline – decrease of average eggs prices (Ovostar selling price in USD terms in Y2016 declined y-o-y by more than 15%) and significant reduction of state support (in form of retained VAT).
Despite EBITDA decline financial standing of the company remains good with low debt (Net Debt – debt less cash – is close to zero), Equity (USD 83.2M as of 30.09.16) is main source of assets financing.
Ovostar keeps to its investment program with the aim to increase annual shell eggs production from almost 1.5bln pieces (the share of the company in Ukrainian industrial eggs production in Y2016 made 18%) to 2.0bln in Y2018-19. At the moment program is completed by 60% (investments in Y2016 made about USD 18M).
Plans of Ovostar for Y2017 imply increase of laying hens stock by 9% vs. Y2016 to 7.1M heads, shell eggs production is to grow by 15% (from 1.479bln pieces up to 1.7bln).