Ovostar Union, one of the leading producers of eggs and egg products in Ukraine, earned $29.08 million in net profit in 9M2023, up 12.2 times year-on-year (y-o-y).
According to the group’s report on the Warsaw Stock Exchange, its revenue for the first nine months increased by 36.3% to $123.06 million, mainly due to higher prices for its products.
Gross profit for January-September this year increased by almost 2.8 times to $42.64 million, operating profit – by 8.2 times to $29.65 million.
It is noted that such an increase in profitability was also achieved by reducing the cost of sales from $66.16 million to $57.40 million due to good feed prices and the devaluation of the hryvnia.
The stability of national currencies also led to Ovostar’s total profit of $29.08 million in the first 9 months of this year, compared to a total loss of $25.16 million in the same period last year, when the hryvnia exchange rate fell.
The group also reported that its debt on bank loans since the beginning of the year has decreased from $10.93 million to $2.46 million, and is currently represented by a UAH 90 million loan from Credit Agricole Bank under the state program at a rate of 13.05% per annum with maturity at the end of March 2024, while the company has fully repaid its obligations to Ukrsibbank and OTP Bank.
Ovostar’s free cash flow jumped to $58.44 million from $12.17 million at the beginning of the year and $5.92 million a year earlier, including the equivalent of $19.77 million in hryvnia from $0.90 million, and $33.89 million in Latvia from $4.76 million.
According to the report, the share of egg sales in revenue slightly decreased to 69.0% from 69.5% in 9M2017, while the share of egg products increased from 30.5% to 31%. At the same time, the share of egg exports in total revenue increased from 34.9% to 45.5%, and the share of egg products exports increased from 56.6% to 60.3%.
As a result, Ovostar’s total export revenue for January-September this year reached 50% of total revenue, compared to 41.5% a year earlier.
The company, which had previously announced the suspension of its investment program amid the ongoing Russian military invasion of Ukraine and the overall unfavorable situation in the national economy, invested $8.88 million in 9M2017 against $5.42 million in 9M2016, with the lion’s share of all investments again in biological assets.
In mid-June 2011, the group’s holding company, Ovostar Union N.V., conducted an IPO of 25% of its shares on the WSE and raised $33.2 million. The majority stake of 67.93% is owned by Prime One Capital Limited, which is controlled by its CEO Boris Belikov and Chairman of the Board of Directors Vitaliy Veresenko.
In January-September of this year, Fairfax Financial Holdings Limited significantly increased its stake in Ovostar from 9.09% to 27.51% by withdrawing from the shareholders’ list Generali Otwarty Fundusz Emerytalny (10.93%) and AVIVA Otwarty Fundusz Emerytalny (5.02%).
As reported, Ovostar earned $6.09 million in net profit in 2022, which is 3.7 times more than in 2021. At the same time, revenue increased by 1.7% to $135.63 mln.
In the first half of 2023, the company earned $20.63 million in net profit, while the same period in 2022 ended with a net loss of $19.78 million. Its revenue for the six months increased by 56.8% to $88.69 million.
