Business news from Ukraine

AVANGARD AGROHOLDING SEES 2.1-FOLD RISE IN LOSS IN Q1 2018

Avangard agroholding, the largest eggs producer in Ukraine, in January-March 2018 saw $11.404 million of net loss, which is 2.1 times more than a year ago ($5.342 million).
According to a company report posted on the London Stock Exchange’s website, consolidated revenue grew by 21%, to $41.099 million and earnings before interest, taxes, depreciation and amortization (EBITDA) were negative being $9.058 compared with $0.1 million in 2017. “Our gross profit was negatively affected by two main factors: an increase in domestic prices for key feed components (grain and oil crops), accounting for c.68% of the company’s cost of sales of shell eggs, along with weak prices for dry egg products in both Ukraine and globally,” the company said, citing Avangard CEO Nataliya Vasylyuk.
She said that the growth of consolidated revenue in Q1 2018 is linked to large exports volumes of shell eggs and dry egg products.
Gross loss in Q1 2018 more than doubled, to $3.6 million. Operating loss grew 3.5-fold, to $12.8 million.
As at March 31, 2018, the total poultry flock amounted to 13.3 million heads, up by 40% compared to 9.5 million heads at December 31, 2017 (March 31, 2017: 14.0 million heads); whilst the number of laying hens remained flat at 9.3 million heads compared to year end (March 31, 2017: 10.6 million laying hens).
In Q1 2018, the production volume of shell eggs rose by 39% year-over-year to 644 million units (Q1 2017: 462 million units) due to the replenishment of the laying flock during 2017, which resulted in the flock’s greater productivity. Sales grew six-fold, to 200 million units.
In the reporting period, the share of export sales reached 41% (Q1 2017: 8%), with the Company exporting shell eggs to 15 countries in the Middle East and North Africa (MENA), Sub-Saharan Africa, Asia and the CIS region.
In Q1 2018, the company increased the output of dry egg products by 68% year-over-year to 1,839 tonnes. In Q1 2018, sales of dry egg products increased by39% year-over-year to 1,651 tonnes. The export of dry egg products rose by 27% year-over-year to 1,413 tonnes.

SMALL PRIVATIZATION TO START IN JUNE – PM GROYSMAN

Privatization of small assets that are not of strategic importance for the Ukrainian economy will begin through the ProZorro system in June, Prime Minister of Ukraine Volodymyr Groysman has said. “I believe that privatization is the fund-raising for industry. This month, a new formula for the sale of small enterprises – through ProZorro – starts openly, publicly, without abuse,” the press service of the government quoted Groysman as saying. According to him, large, strategically important assets will be kept in state property, and those where it is possible to raise capital for updating technologies and multiplying jobs will be made ready with the help of well-known world advisers.
“This practice was carried out by countries with a high standard of living. And we, unfortunately, remained with a bunch of problems that now need to be resolved,” Groysman said.
Earlier, First Deputy Minister for Economic Development and Trade Maksym Nefyodov said that the State Property Fund (SPF) of Ukraine had approved a list of more than 600 small-scale privatization facilities that are subject to privatization in 2018. The first auctions can be announced at the end of June.

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REIMBURSEMENT PROGRAM WILL BE EXPANDED IN UKRAINE

The program of reimbursement for the cost of medicines will be expanded from 2019, Deputy Minister of Health Roman Ilyk has said.
“We are working on supplementing the reimbursement project with new groups of diseases from the next budget year. Until the end of the current year, most likely, there won’t be an expansion of the program, as it requires financial security so that these amounts are pre-funded into the national budget,” he said in an interview with Interfax-Ukraine.
At the same time, Ilyk noted that “for the program expansion, it is necessary to make several changes that are related to the introduction of the policy of electronic document circulation.”
“The patient’s electronic card, electronic prescription, all the documentation regarding the doctor’s prescriptions should be kept in an electronic form. When these norms become effective, most things related to programs monitoring and everything around it will become much easier both for patients and for the medical staff and pharmacies,” he said.
As reported, the Ministry of Health intends to introduce QR labeling of drugs that participate in the reimbursement program.

SPAIN’S ACCIONA TO INVEST EUR 54.7 MLN IN JOINT PROJECT WITH UDP TO BUILD SOLAR POWER PLANT NEAR KYIV

UDP (Kyiv) from the UFuture investment group has arranged a joint project to expand Dymerka solar power plant (Kyiv region) from 6 MW to 57.6 MW with Spain’s ACCIONA Energia Global, the press service of UDP reported on Friday.
“The first project of the Spanish energy giant on the Ukrainian m
arket will be the development of the second, third and fourth stages of the Dymerka solar power plant in Kyiv region with a total peak capacity of 57.6 MW. The first phase of this plant was commissioned by UDP Renewables in the summer of 2017. The total volume of foreign direct investment only in this project is EUR 54.7 million,” UDP said.
The founder of UFuture Vasyl Khmelnytsky said that the launch of the Dymerka solar power plant at a full capacity is scheduled for the first quarter of 2019.
“I believe that this example would stir up the process of attracting investment and the global expertise, which is also important,” UDP reported, citing Khmelnytsky.
ACCIONA Energia CEO Rafael Mateo said that the Spanish company starts its operations in the renewable energy sphere in Ukraine with support of the European Bank for Reconstruction and Development (EBRD).
The UDP said that they arranged with Acciona Energia Global to work together on a broad portfolio of investment projects in both solar and wind energy in the Ukrainian market.
As reported, the first stage of the solar power plant in the village of Velyka Dymerka (Kyiv region) with a capacity of 6 MW was registered for Dymerka solar power plant-1 LLC. The company belongs to the majority shareholder of the UDP development company Vasyl Khmelnytsky.
ACCIONA Energia Global from ACCIONA Group headquartered in Madrid is a global leader in renewable energy with 25 years of experience.
UFuture investment group is a leading business group in Ukraine. It incorporates UDP, the Sikorsky Kyiv airport (Zhuliany), RTM national outdoor advertiser, Bila Tserkva industrial park, UNIT.City and LvivTech.City innovative parks, Biopharma pharmaceutical company and UDP Renewables. UFuture is headquartered in Brussels and its head office is located in Kyiv
UDP Renewables is a Ukrainian developing company in the renewable energy sphere.

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PARLIAMENT’S CHAIRMAN SIGNS LAW ON HIGH ANTI-CORRUPTION COURT

Verkhovna Rada Chairman Andriy Parubiy has signed the law on the High Anti-Corruption Court, passed by the parliament on June 7. “I want to take an opportunity to solemnly sign this law in your presence,” he said at a joint press conference with Speakers of the parliaments of Georgia, Irakli Kobakhidze, and Moldova, Andrian Candu, in Kyiv on Saturday. As reported, on June 7, the Verkhovna Rada, Ukraine’s parliament, approved at second reading and as a whole presidential bill (No. 7440) on the High Anti-Corruption Court.
Some clauses of this bill were changed before second reading as a result of consultations with the IMF. The most controversial clause concerned the decisive role of the public council of international experts in the selection of judges.
The law determines the procedure for holding a competition for the selection of anti-corruption judges.
According to the wording of the bill at the second reading, criminal proceedings against corruption crimes provided for in the commentary of Article 45 (1) of the Criminal Code of Ukraine, Article 206 (2), 209, 366 (1) of the Criminal Code will be subjected to the High Anti-Corruption Court (HACC).
The law enters into force on the day after its publication, with the exception of certain provisions that come into force with the commencement of the work of the High Anti-Corruption Court.

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