Myronivsky Hliboproduct (MHP) based on a preliminary estimate of results for the full year 2019, expects that earnings before interest, taxes, depreciation and amortization (EBITDA) is to be some 15% lower than the company’s previous guidance of $450 million provided in September 2019. According to a company report posted on the website of the London Stock Exchange (LSE) on Thursday, Three factors contributed to the weakening of profitability in the fourth quarter of 2019.
“[It is] strengthening of the Ukrainian hryvnia – as 54% of the company’s revenues are denominated in U.S. dollars, whereas most costs are incurred in UAH, the 13% strengthening of the UAH in Q4 2019 adversely impacted profits, primarily in grain growing operations (accentuated by the seasonality of operations with major expenses incurred in H1 2019),” the company said.
In addition, weak export prices – prices of chicken exports (mainly to the EU) and crops (especially corn) decreased substantially also affected the EBITDA decline. The third factor is the ban on exports to KSA – since September 2019, MHP has been banned from exporting poultry to Saudi Arabia, one of the company’s largest` export markets. MHP said that on 29 January 2020, KSA reopened its market to the import of Ukrainian poultry products (excluding products from the Vinnytsia region).
“Despite this, MHP ended the year with net debt at US$1,143 million and more than $300 million in cash. With no major debt facilities maturing until 2024, very limited short-term borrowings (around 2%) and a modest CAPEX program, it remains MHP’s policy to maintain robust cash reserves that are not materially affected by the weaker than expected financial performance,” MHP said.
The company said that the 2019 dividend is subject to the board of directors’ decision, however, taking into account the lower results, dividends are expected to be lower than last year.
The growth of Ukraine’s economy in the fourth quarter of 2019 slowed down to 2.2% and will again exceed 3% in the first quarter of 2020, Dmytro Sologub, the Deputy Governor of the National Bank of Ukraine (NBU), has stated. “According to our estimates, behind the growth figure [GDP] of 3.3% in 2019 is the fourth quarter growth of 2.2% … Regarding the first quarter, we currently have an estimate of GDP growth above 3%,” he said at a briefing in Kyiv.
As reported, the NBU worsened the forecast for GDP growth in 2019 to 3.3% from 3.5% and kept it at 3.5% in 2020 and 4% in 2021.
Sopharma AD pharmaceutical company in 2019 increased sales in Ukraine by 5% compared to 2018. According to the company’s preliminary report, in general, in 2019, revenue from sales to European countries increased by 21% compared to 2018.
The company noted that such an indicator was achieved, in particular, due to an increase in sales in Ukraine by 5% and in Russia by 32%, as well as an increase in sales to the Balkan countries, as well as Poland, the Czech Republic, Moldova, and other countries.
In addition, the company reports that in 2019 the company received 47 permits for the use of new medicines, in particular, in Ukraine, for the preparation of desloratadine in two dosage forms, as well as two names of cosmetic products.
As reported, in January-June 2019 Sopharma increased sales in Ukraine by 35% compared to the same period in 2018.
Since January 2008, Sopharma AD has been controlling PJSC Vitamins in Ukraine, and in August 2012 it created the subsidiary Sopharma Ukraine LLC (Kyiv) to optimize its trading business.
PrJSC Severodonetsk Azot, part of Group DF belonging to businessman Dmytro Firtash, in 2019 tripled production of mineral fertilizers, to 384,090 tonnes, the group’s press service has said.
Production of ammonium nitrate amounted to 371,660 tonnes (3.8 times more than a year earlier), commercial water ammonia to 1,650 tonnes (36.4% more), carbamide-ammonia mixture to 10,780 tonnes (doubled). Production of non-concentrated nitric acid amounted to 296,200 tonnes, which is 3.7 times more than a year earlier.
“The large-scale and important project for us over the year is the start of production at the new UAN liquid fertilizer plant. The result is as follows: we produced twice as many UANs as a year earlier, when we used the temporary UAN production technological scheme,” the press service said citing chairman of the board Leonid Buhayev.
The report also noted that in addition to the installation of the UAN production facility, projects for the modernization of the ammonia-refrigeration unit in ammonia production workshop 1-A, overhauls in the nitric acid production workshop, the steam supply and general communications department, and a number of other divisions became important for the enterprise’s work.
According to the press service, the total capital investment of the enterprise last year amounted to UAH 32.73 million.
PrJSC Severodonetsk Azot is one of the largest Ukrainian chemical enterprises. It has been part of Group DF since 2011. The core business of the enterprise is production of mineral nitrogen fertilizers.
Metinvest, the largest Ukrainian mining and metallurgical holding, increased steel production by 3% in 2019 compared with 2018, to 7.578 million tonnes, and pig iron production fell by 3%, to 7.928 million tonnes, and total coke production – by 11%, to 4.667 million tonnes. Metinvest B.V., the parent company of the holding, said in a report on operational results for Q4 2019 and entire 2019, in Q4 2019 pig iron production fell by 7% compared with the previous quarter, to 1.887 million tonnes due to scheduled major overhauls of blast furnaces at the Mariupol steelmakers.
Steel production in Q4 2019 fell by 16% compared with the previous quarter, to 1.673 million tonnes as the group both produced less hot metal and allocated more to make merchant pig iron. The latter came amid higher demand for that product and lower demand for slabs and finished products.
In Q4 2019, coke production totaled 1.05 million tonnes, which is 8% less than in the previous quarter due to a fall in domestic consumption in the reporting period.
In 2019, Metinvest’s coke output dropped due to: a shortage of coal that started in June 2019, as direct supply stopped from Russia; unstable operation of coke-oven batteries, a coke dryquenching plant and emergency shutdowns of coke cars early this year at Avdiyivka Coke Plant; and lower intragroup consumption in Q4 2019.
Andy Hunder, President of the American Chamber of Commerce in Ukraine, today met with U.S. Secretary of State Mike Pompeo at the U.S. Embassy in Kyiv to deliver the voice of business in the course of the Secretary’s visit to Ukraine.
Andy Hunder thanked Secretary Pompeo and the entire U.S. Department of State for providing support to all AmChams throughout 43 European countries. AmCham Ukraine’s office is, by far, the biggest in Europe.
Mr. Hunder delivered AmCham Business Climate Survey and provided tangible examples of realities of doing business on the ground, voicing member companies’ success stories. He stressed that the mood of business is upbeat, with 88% of AmCham members seeing increased growth in revenues and 65% increasing investment in Ukraine.
“Ukraine is ripe for U.S. investment, and now is the time to invest in Ukraine. There is a need to shift the narrative on U.S.-Ukraine relations to focus on business and investment. Ukraine is going through a massive overhaul and the 600 members of the American Chamber of Commerce are seeing growth and increased revenues for their business in Ukraine,” commented Andy Hunder, President of the American Chamber of Commerce at the meeting with Mike Pompeo on January 31st.
The parties also discussed rule of law, further cooperation with the IMF, unlock of the U.S. Export-Import Bank’s (EXIM) full financing capacity, and OPIC’s transformation into the U.S. International Development Finance Corporation (DFC).
Andy Hunder thanked Secretary Pompeo for the constant support that Chargé d’Affaires, a.i. Kristina Kvien and the whole U.S. Embassy team provide to members.
The American Chamber of Commerce in Ukraine sees that the business optimism is growing and will continue to help businesses grow in Ukraine throughout 2020.
