Business news from Ukraine

UKRGASBANK WILL ISSUE UAH 1 BLN LOAN TO AGRARIAN FUND

KYIV. Dec 1 (Interfax-Ukraine) – The Ministry of Agricultural Policy and Food has agreed a loan agreement for UAH 1 billion between PJSC Agrarian Fund and Ukrgasbank.

“Funds received from our partner – state bank Ukrgasbank – will be used to finance forward programs and support for agricultural producers,” Agrarian Fund Chairman Andriy Radchenko said.

The interest rate under the agreement is 21.5%. The collateral is food wheat, the market value is over UAH 2 billion.

In 2015, the Agrarian Fund and Ukrgasbank signed a loan agreement for UAH 300 million for one year.

LEKHIM’S TECHNOLOG PHARMACEUTICAL FACTORY SEEKS TO HAVE WHO PREQUALIFICATION IN 2017

UMAN. Nov 30 (Interfax-Ukraine) – Private joint-stock company Technolog (Uman, Kyiv region), part of Lekhim group of pharmaceutical companies, seeks to have prequalification of the World Health Organization (WHO) in 2017. This would help to double or triple exports of medicines to treat TB.

“We are preparing papers for receiving WHO prequalification. By late 2017 we seek to receive it. With WHO prequalification we would be able to double or triple exports of medicines to treat TB,” Technolog Director General Serhiy Remsky told reporters on Monday.

He said that in general exports totals up to 15% of total sales of the company. The company mainly supplies medicines to the CIS countries.

“Our medicines are registered in the CIS countries. We have plans to enter foreign markets,” Remsky said.

He said that Technolog is to spend money on papers and tests to receive WHO prequalification.

Remsky said that spending on confirmation of bioequivalence of one medicine could total up to UAH 1.5 million and at least 12 volunteers are tested. Technolog involved 32 volunteers.

He said that after prequalification for anti-TB medicines, the company would consider having prequalification for HIV/AIDS medicines.

UKRAINE TO APPROVE AVIATION INDUSTRY RESTORATION PROGRAM WITH MEDIUM TERM OUTLOOK EARLY 2017

KYIV. Nov 30 (Interfax-Ukraine) – An ad hoc working group being created in the government would draw up a program on restoration of Ukrainian aviation industry for the medium term outlook. The document is to be approved by Ukraine’s Cabinet of Ministers early 2017.

The press service of the government reported that the decision was made after a meeting devoted to stimulation of Ukrainian aircraft building chaired by Ukrainian Prime Minister Volodymyr Groysman at Antonov State Enterprise (Kyiv).

The working group would consist of representatives of the government, design companies and aircraft operators.

The program would contain development plans for civil and military aircraft.

The financial tools required for the implementation of the program would be determined after completion of the document.

Groysman said that today the 2017 budget does not foresee funds for financing the program. The government would be able to present initiatives to amend the budget after determining the needs of customers in aircraft.

He said that the sector would receive support from the state.

DRAGON CAPITAL CEO FIALA ELECTED EBA PRESIDENT

KYIV. Nov 30 (Interfax-Ukraine) – The reshuffled board of the European Business Association (EBA) on November 28 elected Dragon Capital CEO and founder Tomas Fiala president of the association. After a one-year break he heads the association for the third time.

The EBA said on Tuesday that Board Chairman of Raiffeisen Bank Aval Volodymyr Lavrenchuk and Jacobs Douwe Egberts President of the EEMEA region Taras Lukachuk were elected vice presidents for 2017.

The association said that the president and two vice presidents form the presidium intended to strategically coordinate the operation of the association and making board decisions.

Last year Krzysztof Siedleskі, Head of Astellas Pharma Europe BV in Ukraine, was elected EBA president.

The EBA was founded in 1999. With more than nine hundred members, the EBA is the largest premier union of businesses operating in the Ukrainian market.

STATE AGENCY FOR E-GOVERNMENT, MICROSOFT INTEND TO COOPERATE

KYIV. Nov 30 (Interfax-Ukraine) – Ukrainian Prime Minister Volodymyr Groysman has discussed the possibilities of applying modern technologies during the reform process in Ukraine with Microsoft Corporate Vice President for Central and Eastern Europe Don Grantham, the information and public communications department of Ukraine’s Cabinet of Ministers has reported.

Groysman said that Ukraine needs technological solutions. The government is ready to step up cooperation with Microsoft.

“The introduction of the full-featured e-government and other systems is important. We want to be effective. We need to enhance all services we are providing and make them easy of access, clear and convenient,” the prime minister said at the meeting.

The sides discussed the possibilities of cooperation in e-government, fight against corruption, tax system, customs services and healthcare.

After the meeting Groysman instructed Head of the State Agency for E-Government Oleksandr Ryzhenko jointly with representatives of Microsoft to draw up a cooperation plan and submit it to the government for approval.

“We see Ukraine’s success in economic reforms from the point of view of Microsoft when technology is at its very heart,” Grantham said.

KERNEL SEES 2.6-FOLD RISE IN NET PROFIT IN Q1 FY2017

KYIV. Nov 30 (Interfax-Ukraine) – Kernel, a large Ukrainian agrarian group, saw a 2.6-fold rise in net profit in Q1 FY2017 (July 2016-June 2017) year-over-year, reaching $63.07 million.

The company said in a report its revenue in July-September 2016 grew by 2%, to $384.06 million stemming from y-o-y increase in sales volumes and lower international agricultural prices.

Gross profit increased 28% year-over-year to $94.7 million in Q1 FY2017, as a result of positive revaluation of biological assets, and improved operating performance of our infrastructure and farming divisions. Earnings before interest, taxes, depreciation and amortization (EBITDA) increased by 31.4%, to $72.4 million and profit from operations – by 43%, to $58.5 million.

The company decreased net debt by 16%, reaching $326.2 million as of late September 2016. This resulted in a fall in net debt/ EBITDA ratio to 0.9 from 1.0 a year ago.

Sunflower oil business weak performance in Q1 FY2017 was within expectations (sales fell by 7.8%, to $175.6 million). Sales volumes grew by 7.2%, to 188,600 tonnes. Bottled sunflower oil sales grew by 13.7%, to $23.3 million in money terms and by 20.3% in kind, to 21,300 tonnes.

EBITDA contribution declined to $12.6 million, down 52% year-over-year, due to poor availability of sunflower seeds in the market in May-June 2016, which translated into expensive carry over stock.

Grain business continued to set records in Q1 FY2017 with 1.2 million tons of grain exports, up 27% year-over-year, as we accumulated a presold stock at year ended June 30, 2016. In money terms grain sales grew by 13.3%, to $199.7 million.

Consequently, the gain and infrastructure segment’s EBITDA contribution was $21.9 million, up 4% year-over-year. As a result, the export terminals’ total EBTIDA came to $10.5 million in Q1 FY2017, experiencing a two-fold increase as compared to a year ago. The silo services segment total EBITDA contribution amounted to $7.1 million, up 39% year-over-year.

The company’s farming division posted record revenues of $146 million, 2.6-fold increase year-over-year, with EBITDA at $77.7 million compared to $22.6 million a year ago, stemming from further improvements in farming technology attributable to revaluation of our crops in fields and agricultural produce at the moment of harvest as a result of a double digit growth in yields, and $30.8 million of unrealized profits, arisen upon intragroup sales of agricultural products, which remained unsold to the third parties as of the end of the reporting period.

The total grain and oilseed harvest is expected to increase by 14% year-over-year to 2.13 million tonnes in FY2017.

As reported, Kernel saw a 2.1-fold rise in net profit in FY2016, totaling $225.2 million. Its revenue fell by 14.6%, to $1.989 billion and earnings before interest, taxes, depreciation and amortization (EBITDA) – by 12.7%, to $346.4 million.

Kernel is a vertically integrated company which has been operating in the Ukrainian agribusiness sector since 1994. The group produces sugar and sunflower oil, distributes bottled oil, exports oil and grain and provides elevator storage services for grain and oilseeds.