Business news from Ukraine

OVOSTAR UNION HAS 2% RISE IN PROFIT IN 2017

Ovostar Union, a leading shell egg and egg products producer in Ukraine, saw a 2% rise in net profit in 2017, to $22.9 million.
According to a report of Ovostar published on Friday, revenue last year grew by 27%, to $98.7 million, and gross profit – by 18%, to $30.8 million.
Earnings before interest, taxes, depreciation and amortization (EBITDA) grew by 10%, to $26.5 million.
Assets rose by 19%, to $131 million, noncurrent liabilities narrowed by 20%, to $9.8 million and current grew by 52%, to $14.3 million.
Total debt fell by 11%, to $13.6 million, and cash and cash equivalents – by 23%, to $15 million.
The shell egg segment generated 69% of total revenue, the egg products segment – 30% and oil segment – 1%. Export revenue doubled, to $47.7 million. The share of products sold in Ukraine was 52%, that in the Middle East – 30%, the EU – 15% and other countries – 3%.
In 2018, Ovostar’s export sales are expected to generate around 50% of its total revenue, provided that no external factors negatively influence the egg industry.
“In terms of operating results, we expect the share of export in total sales volume of shell eggs to remain over 40%, of dry egg products – over 70% and of liquid egg products – over 40%,” the company said.
During 2017 the company decided to put the construction of new poultry houses on hold due to the recorded cases of avian influenza in the south of Ukraine, which led to restrictions in export of shell eggs from Ukraine.
“In 2018 we aim to continue expanding the production facilities and are intended to construct two poultry houses for laying hens, two rearing houses and a fodder mill,” the company said in the report.

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UKRAINIAN RAILWAY CAR BUILDERS HAVE ORDERS TO BUILD OVER 1,000 CARS IN JAN-MARCH

Ukrainian railway car building enterprises received orders to produce over 1,000 cars in Q1 2018 from private companies operating on the cargo transportation market.
An Interfax-Ukraine correspondent has reported that acting Ukrzaliznytsia CEO Yevhen Kravtsov gave this information at the Ukrainian Infrastructure Forum in Kyiv on Thursday.
He linked this fact with the effect of deregulation of the railway car component of the tariff conducted early this year.
“We saw the reaction of the business to the market value of transportation in the cars of Ukrzaliznytsia. Loading of Ukrainian car building enterprises and increasing the private fleet of cars is an important fact. In the first quarter, Ukrainian car building enterprises received orders for more than 1,000 cars, and this is an important indicator,” Kravtsov said.
According to him, thanks to the deregulation of the car component at the beginning of this year, the cost of transportation by Ukrzaliznytsia wagons and by private wagons has become almost the same, which will attract private capital to the railway and stimulate the investment attractiveness of the railway car fleet.
“The imbalance in the freight transportation market regarding the cost of transportation by Ukrzaliznytsia wagons and private wagons was one of the main obstacles for private investment in the construction of wagons,” Kravtsov said.
The head of the company also said that conditions have now been created under which the introduction of a market price allows to receive back investments in a freight car during the period of its service life.
“Today, with the new prices for rolling stock, the payback of investments is 7-10 years and it is covered by the operating life of the car,” he said.
Kravtsov also said that today Ukrzaliznytsia, as one of the largest operators of the car fleet, is also interested in attracting investments in the car fleet, in particular, gondola cars and grain trucks, which are the most in demand today in the transportation market. It is for this purpose that at present Ukrzaliznytsia, together with the European Bank for Reconstruction and Development (EBRD), is implementing a project to increase the car fleet of the company by approximately 7,000 wagons.
“This project has direct economic effect and [efficient] payback,” Kravtsov said.

NBU ESTIMATES UKRAINE’S GDP GROWTH AT 2.3% IN Q1 2018

The growth of real GDP of Ukraine in the first quarter of 2018 in annual terms (quarter-over-quarter) was 2.3%, according to the assessments of the National Bank of Ukraine (NBU). The growth was thanks to the further increase in population income and retaining the favorable situation on foreign markets.
“An additional factor was the reduction in the comparison base of last year under the influence of the trade blockade of uncontrolled areas last year, the full effect from which is expected from the second quarter,” the central bank said in its inflation report released on Friday night.
At the same time, the NBU points out that the worsening of weather conditions at the end of February and in March somewhat inhibited the revival of economic activity, particularly in transport and construction.
According to the central bank, domestic demand remained the main factor of economic growth. Private consumption supported further increases in salaries and social standards, including an increase in pensions at the end of last year and a minimum wage from the beginning of 2018, as well as improving consumer expectations of households.
“The acceleration in the growth of production of machine-building products, in particular automobile and railway, was the indicator of the further growth,” the NBU said.
The central bank said that in January-February 2018, exports continued to grow, mainly thanks to the increase in the supply of some food products, wood and products made from it, as well as ferrous metals. At the same time, consumer imports were growing at a rapid pace, contributing to the change in GDP.

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UKRAINE CLIMBES FROM 99TH TO 80TH POSITION IN QUALITY OF NATIONALITY INDEX IN 2017

Ukraine climbed from 99th to 80th position in the Henley & Partners – Kochenov Quality of Nationality Index (QNI) and was included in the list of the top three countries with the most significant growth in the value of nationality, Henley & Partners reported on Friday. According to researchers, in 2017, Ukrainian citizenship received a rating of 36.1%, which is 6.4 percentage points higher than in the previous year’s rating. The main reason for this growth is the introduction of a visa-free regime with the Schengen countries, and the number of countries with visa-free entry for Ukrainians increased from 81 to 115 last year, they say.
They argue that Ukraine could have occupied even higher positions in the rating if not for geopolitical issues and armed conflict and recall that the country’s position in the QNI five years ago was better than now – 74th in 2013 and 78th in 2014.
Of the 209 countries studied in 2017, for the first time in the last five years, the first place went to France – 81.7%. Germany, the leader of last year’s rating, dropped to second place with 81.6%.
The top ten countries also include Iceland, Denmark, the Netherlands, Norway, Sweden, Finland, Italy, Ireland, Switzerland, and Austria.

FIRST UKRAINIAN INTERNATIONAL BANK PLANS TO DOUBLE PROFIT THIS YEAR

Kyiv-based First Ukrainian International Bank (FUIB) intends to double its profit in 2018, FUIB Board Chairman Serhiy Chernenko has said. “FUIB intends to double its profit this year,” he said at a press conference in Kyiv on Friday. FUIB’s net profit in 2017 amounted to UAH 785.8 million, which is more than twice as high as in 2016. FUIB was founded in 1991. As of early January 2018, its largest shareholder was Rinat Akhmetov (99.901045%).
According to the National Bank of Ukraine, as of January 1, 2018 FUIB ranked ninth (UAH 54.632 billion) in terms of total assets among the 84 banks operating in the country.

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LITHUANIA HOPES FLIGHT FROM KYIV TO PALANGA RESORT BE RELAUNCHED

Lithuania expressed hope that the direct flight from Kyiv to the Lithuanian resort Palanga will be resumed, Lithuanian Ambassador to Ukraine Marius Janukonis has said. “In past years we were very pleased that Ukraine International Airlines launched a direct flight to Palanga. We are now making efforts to resume this flight,” he said at the presentation of the Lithuanian resort in Kyiv on Wednesday. In turn, Mayor of Palanga Sharunas Vaitkus said that the resort is annually visited by about 1 million tourists. At the same time, the city’s leadership is developing ways to extend the holiday season, including by building sanatorium facilities and developing curative programs.
Palanga is a resort town in Lithuania on the coast of the Baltic Sea. The length of the main beach of the resort is 25 km.

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