Business news from Ukraine

OVER 50% OF BUSINESS AND ELITE CLASS APARTMENTS IN KYIV BOUGHT BY RESIDENTS OF OTHER CITIES, DEMAND GROWS BY 7-10% IN JUNE-JULY – EXPERTS

KYIV. July 28 (Interfax-Ukraine) – Over 50% of business and elite class apartments in Kyiv are bought by residents of other regions of Ukraine, mainly from eastern regions of Ukraine, Park Stone residential complex (Kyiv) said in a press release on Monday, referring to the head of the sales department Dmytro Shostia.

“In 60% of cases finished apartments are bought with the purpose of investment and leasing apartments: people are trying to save their money via investing into high-quality and expensive property, which they believe would be always of great demand. It is hard to predict how capacious the prestige apartment leasing market would be in coming years,” Shostia said.

He said that business and elite class apartments in Kyiv with gross area of 85-150 square meters in Pechersky district are of great demand with buyers.

Despite the fact that since early 2015, prices in Kyiv’s business and premium class apartment blocks have stabilized at $2,000-4,000 per square meter, demand on them grew by 7-10% in June-July, he said.

He said that these apartments are bought using cash, and this allows buyers to receive a discount of 10-25%.

UKRSPECEXPORT SEES 52% RISE IN NET PROFIT IN H1 2015

KYIV. July 28 (Interfax-Ukraine) – State enterprise Ukrspecexport saw a rise of 52% in net profit under Ukrainian accounting standards in January-June 2015 year-over-year, to UAH 39.33 million, the company said in a report on Monday.

The company said that its net revenue grew by 98.35% in H1 2015, to UAH 713.16 million. Gross profit rose by 39.95%, to UAH 271.52 million, and operating profit fell by 13.69%, to UAH 20.39 million.

In January-March 2015, Ukrspecexport saw a rise of 2.1 times in net profit under Ukrainian accounting standards year-over-year, to UAH 34.57 million, and its net revenue grew by 90.335, to UAH 445.67 million.

Ukrspecexport is the state’s authorized mediator in foreign economic activities in the field of exports and imports of products and services that are subject to export controls.

Under the government decision, Ukrspecexport and its subsidiaries have been part of state-owned Ukroboronprom concern since December 2010.

UKRAINIAN-DUTCH AGRO-COMPANY INVESTS UAH 10 MLN IN LAUNCH OF MILK FARM IN SUMY REGION

KYIV. July 28 (Interfax-Ukraine) – Ukrainian-Dutch agro-company LLC (Sumy region) has invested UAH 10 million of own funds in the launch of a milk farm in Chapliyivka of Sumy region.

According to a report on the website of Sumy Regional Administration, the company finished building the cowhouse with a milk pipeline for 226 cows.

The company’s director, Vitaliy Hudymenko, said that today the farm has 718 heads of cattle, including 338 cows.

In 2015, UAH 6.8 million was invested in the development of the facilities.

According to the state register of companies and individuals-businesspeople, the founders of Ukrainian-Dutch agro-company LLC are Dutch Elzasel B.V. and Bontrup Ukraine.

Bontrup Ukraine was founded in 2007. It has around 20,000 hectares of farmland. Bontrup Ukraine is part of Bontrup Holding (the Netherlands) created by Franz Bontrup. The holding has branches in Belgium, Germany, Ukraine, Switzerland, Norway, Britain, Russia, Poland and the United States. Its core business is agriculture, navigation and granite production.

AGRICULTURE MINISTRY INITIATES ZERO EXCISE DUTY FOR SPIRIT USED IN PRODUCTION OF VINEGAR, PERFUMES

KYIV. July 27 (Interfax-Ukraine) – The Agricultural Policy and Food Ministry of Ukraine has proposed that a zero excise duty should be set for ethyl spirit used in the production of diluted acetic acid, perfumes and cosmetics, technical and chemical products.

According to a draft law on amending Article 229 of the Tax Code of Ukraine regarding taxation and regulation of the production and use of spirit, posted on the ministry’s website, the measures will stimulate the development of the spirit sector.

The ministry said that since 2005, the requirement to set a beneficial excise duty on ethyl rectified spirit, which is used to produce vinegar, and ethyl denature spirit for production of perfumes and cosmetics, chemical and other spirit-containing technical products. This resulted in the reduction of production of the above-mentioned products and the drop in spirit production, stoppage of distilleries, reduction of workforce and a decline of tax payments to the budgets of all levels.

At present, the full excise duty is set on spirit irrespective of the purpose of its use (UAH 70.53 per liter of 100% spirit), which restricts its application.

According to an explanatory note to the draft law, household detergent producers refused to use technical spirit made in Ukraine at the high price, as the cost of spirit considerably increases the price of detergents compared to the similar imported products. Ukrainian spirit-containing technical products were replaced by similar goods from Belarus, Moldova, Lithuania and Poland.

The ministry said that the annual production capacity of state distilleries totals over 60 million decaliters, which is four times bigger than the market’s needs. Exports are restricted, as the Association Agreement between Ukraine and the EU includes a quota of 27,000 tonnes.

“The zero excise duty for the said types of spirit would allow harmonizing the structure of the excise duty under Directive 92/83/EEC and it would allow loading Ukrainian distilleries, improve their financial and economic state and increasing payments to the national budget.

 

AGRARIAN FUND SEES 58.3% RISE IN NET PROFIT IN H1 2015

KYIV. July 27 (Interfax-Ukraine) – Public joint-stock company Agrarian Fund saw UAH 624.635 million in net profit in January-June 2015, which is 58.3% up year-over-year, the company said in a quarterly report.

The company said that its net revenue over the period fell by 30.4%, to UAH 1.398 billion.

Gross profit totaled UAH 454.892 million in January-June 2015, which is 45.1% up year-over-year. Operating profit grew by 70.3%, to UAH 540.579 million.

Agrarian Fund was created under a cabinet resolution in spring 2013. Its charter capital is UAH 5 billion.

TURBOATOM SEES 24% RISE IN NET PROFIT IN H1 2015

KYIV. July 27 (Interfax-Ukraine) – Public joint-stock company Turboatom (Kharkiv), Ukraine’s largest producer of turbine equipment, saw UAH 837.91 million in net profit in January-June 2015, which is 24% up year-over-year, the company said in a financial report.

The company said that its net revenue over the period grew by 24.9%, to UAH 1.294 billion.

Turboatom saw UAH 610.34 million of gross profit (a rise of 59% year-over-year). Operating profit rose by 33%, to UAH 840.71 million.

Turboatom’s liabilities as of July 1, 2015 totaled UAH 1.395 billion, including bills payable for goods and services of UAH 24.79 million, advance payments of over UAH 1 billion, budget payments of UAH 3.2 million, wage payments – UAH 13.05 million, current maintenance – UAH 51.4 million.

Taking into account previously published data, in April-June 2015 the company saw its net profit fall by 45.5% year-over-year, to UAH 153.36 million, while its net revenue grew by 17.1%, to UAH 639.04 million.

The state owns a 75% stake in Turboatom, while Cyprus-based Linfot Ltd., affiliated with businessman Konstantin Grigorishin, holds about 15.3%.