22 January 2016
Results have been slightly worse than could be expected. Total flock of hens further increased in Q4 2015 – from 6.1M as of 30.09.15 up to 6.5M. Along with it total production volume remained on the level of previous quarter, while shell eggs export declined.
Total eggs production in Q4 made 308M eggs, which was by 3% more than in corresponding period of previous year (in total Y2015 1196M eggs was produced, +15% vs. Y2014), so rate of growth in Q4 decreased vs. previous quarters.
Sales of shell eggs made 67% of total realization volume – 206M eggs (-12% to previous quarter, -14% to Q4 2014), mainly as a result of lower domestic realization, though export also decreased vs. previous quarter by 23% (to 57M eggs). Such worse than expected results can be connected with significant increase of realization price. Stated in report average realization price for the whole Y2015 was UAH 1.374 per egg, which (taking into account average price at UAH 1.25/egg in 9m2915) means average realization price for Q4 made UAH 1.77/egg (vs. UAH 1.34/egg in previous quarter). It is common situation on Ukrainian market, when prices grow in Q4 of a given year (as significant part of eggs is still produced by households, so production decreases with start of winter season), along with it, basing on sales dynamics, we can suspect that the company shifted its focus more to profitability in Q4 (so one can expect higher margins, as inputs costs have been almost unchanged vs. previous quarter).
For the whole Y2015 volume of shell eggs sales made 862M, +17.6% vs. previous year, so annual results have been quite good. Total volume of export made 229M eggs, 26.6% of total (12% in Y2014). For Y2016 the company plans to further develop its export operations, as, taking into account decline in purchasing power of Ukrainian population, domestic realization is expected to stagnate.
As for eggs processed, volume of realization in Q4 increased by close to 10% vs. both corresponding period of Y2014 and previous quarter, which slightly mitigates worse than expected results in Q4 for shell eggs realization.
Financial results of the company for Y2015 will be released on April 15.