Business news from Ukraine

Balanutsa dismissed from post of Ambassador of Ukraine to Kuwait – decree

Oleksandr Balanutsa has been dismissed from the post of Ambassador Extraordinary and Plenipotentiary of Ukraine to the State of Kuwait.

The corresponding decree of the President of Ukraine No. 251/2024 was published on April 30 on the official website of the President of Ukraine.

Source: https://www.president.gov.ua/documents/2522024-50513

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“Nova Poshta” to issue E and F series bonds

Nova Poshta LLC, the largest logistics operator in Ukraine and a member of the NOVA group, is issuing interest-bearing unsecured corporate bonds of series E and F.

According to the National Securities and Stock Market Commission of Ukraine (NSSMC), it registered both issues on April 26 this year.

At the same time, information on the parameters of these issues, including the volume, maturity and yield, is not yet available on the regulator’s website or on the issuer’s website.

Last year, Nova Poshta made two bond issues – “C” and “D” – each with a nominal amount of UAH 800 million. The C series bonds were issued for a 12-month term with a 24% p.a. rate, while the D series bonds were issued for a 20-month term with a 23% p.a. rate.

Earlier in February 2023, Nova Poshta redeemed the UAH 700 million of Series B bonds issued in March 2020.

According to the clarity-project, in 2023 the company increased its net profit by 85.7% to UAH 3 billion 967.2 million, and its revenue increased by 54% to UAH 36 billion 468.9 million.

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Prydniprovsky Plant increased its net profit by 24%

PrJSC Prydniprovsky Plant (Dnipro), one of the largest dairy processing companies in Ukraine (Zlagoda and Lyubimchik brands), increased its net profit by 24% in 2023 compared to 2022, to UAH 165.116 million.

According to the company’s report in the NSSMC disclosure system, its revenue for the year increased by 22.8% to UAH 2.522 billion, assets by 37.1% to UAH 788.76 million, and debt obligations by 1.7 times to UAH 127.914 million. At the same time, the company increased its staff by 12 people to 932 employees.

At the annual meeting on April 19, the shareholders decided to pay UAH 4.340 million in dividends based on the company’s performance in 2023. The Supervisory Board of PrJSC Prydniprovsky Iron and Steel Works decided to draw up a list of persons entitled to receive dividends by June 1, 2024. The amount of dividends per 1 ordinary registered share is UAH 0.62. Dividends will be paid from June 1 to October 30 directly to shareholders, in particular, to individuals through the cash desk, and to legal entities to their bank accounts.

The Supervisory Board is confident that the payment of dividends will not worsen the company’s condition.

Prydniprovsky was founded in 1990 on the basis of Dnipropetrovs’k Hormone and Milk Plant No. 2. It manufactures products under the Zlagoda and Lyubimchyk brands. It includes: Vasylkivsky Cheese Plant, Tsarychansky Butter Plant, Pereshchepynsky Dairy Plant, and Novomoskovsky Fruit Fillers Production Shop. The company’s milk processing capacity exceeds 250 tons per day.

According to the Unified State Register of Legal Entities and Individual Entrepreneurs, the ultimate beneficiaries of Prydniprovsky Plant are Andriy Veretennikov (46.71%) and Tetiana Nenarochkina (43.42%), former deputy of the Dnipro City Council.

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Sales of agricultural land increased in Ukraine, land prices increased by 11.2%

In January-March 2024, the capitalization of the agricultural land market in Ukraine increased by UAH 202.5 billion, due to a 7% increase in the number of agricultural land sales transactions and an 11.2% increase in land prices, said Vice President of Kyiv School of Economics (KSE) for Economic Education, Professor Oleg Nivievsky at the seminar “Land Market: New Players, New Challenges, New Prospects” organized by KSE and the USAID AGRO program.

According to his information, in the first quarter of 2024, 25.7 thousand transactions of purchase and sale of agricultural land plots with a total volume of 58.8 thousand hectares were concluded in Ukraine, which is 7% higher than in the fourth quarter of 2023, which recorded a record number of transactions of purchase and sale of agricultural land for the entire time after the start of the full-scale invasion.

In the first three months of this year, the weighted average price of a hectare of agricultural land increased by 11.2%. While in the fourth quarter of last year it amounted to UAH 37.7 thousand, in January-March 2024 it increased to UAH 42.0 thousand per hectare. Thus, the capitalization of the agricultural land market has increased by UAH 202.5 billion since the beginning of this year, stated Nivievsky, and attributed these phenomena, in particular, to the opening of access to the land market for legal entities from January 1, 2024.

“Despite the full-scale war and a rather limited model, the agricultural land market in Ukraine is developing successfully. A clear indication of this is the recent decision of the National Bank to increase the liquidity ratio of agricultural land from 0.35 to 0.5. This has already opened up the possibility for the agricultural sector and landowners to attract additional funding worth $25 billion, which is comparable to the annual financial needs of farmers and landowners,” said the KSE Vice President.

Roman Neter, KSE Agrocenter expert, said that in January-March 2024, 436 legal entities purchased 2957 agricultural plots with a total area of 8.5 thousand hectares. At the same time, a little less than half of the transactions took place in March 2024, when 276 legal entities exercised their right to purchase agricultural land, acquiring 1253 land plots with a total area of 3.5 thou hectares.

He recalled that at the end of 2023, before the launch of the second stage of the land market, a number of experts expressed concerns about the possibility of large players accumulating large areas of farmland. But in the first quarter of 2024, these fears were not confirmed.

“The share of legal entities in the land market in the first quarter was only 14.5%, while the rest of the transactions are still made between individuals. At the same time, the opening of access to the land market for legal entities is already having a positive impact not only on liquidity but also on market transparency,” Nater emphasized.

Ksenia Sydorkina, USAID AGRO Program Director, said that the development of the agricultural land market is increasingly affecting the public finance system of communities after the personal income tax paid by military personnel was redirected to the state budget. Since January 2024, the increase in revenues related to agricultural land has offset the decline in other community tax revenues by a quarter. For example, in February of this year alone, taxes related to agricultural land accounted for 13% of all community tax revenues, compared to 10% in February 2023, and reached UAH 3 billion, which is 20% higher than the same period last year.

“The agricultural land market is an additional resource for the restoration of territories, the potential of which has yet to be realized by joint efforts of the government, lawmakers and communities,” said USAID AGRO Chief of Party and expressed confidence in the need to implement the reform of spatial development of territories and a number of other projects on land consolidation, irrigation development, affordable lending for small and medium-sized agricultural producers, including with the support of the Partial Guarantee Fund for Agricultural Loans, as well as with the support of the Fund.

Sydorkina said that international law experts from the Civitta, Aequo, and EasyBusiness consortium, with the support of the USAID AGRO program, have developed a concept for harmonizing Ukraine’s land legislation with EU law. The concept envisages the development and adoption of 14 legislative acts that will facilitate the approximation of Ukrainian legislation to European law, the development of land relations and the agricultural sector as a whole.

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UMCC earned UAH 30 mln in profit

PrJSC United Mining and Chemical Company (UMCC), which has taken over management of Vilnohirsk Mining and Metallurgical Plant (VGMK, Dnipro region) and Irshansk Mining and Processing Plant (IGOK, Zhytomyr region), posted a net profit of UAH 30 million in January-March this year, compared to a loss in the same period last year.

According to the company’s press release on Monday, the company planned to make UAH 20 million in net profit in the first quarter.

According to Yegor Perelygin, First Deputy Chairman of the Board, the last months of 2023 were difficult, but despite this, the management managed to lay a strong foundation for 2024.

“We have made every effort to ensure that our titanium giant operates even in difficult military conditions. Numerous negotiations with contractors and expansion of the geography of end customers are our main task, which we are successfully implementing. We have successfully rebuilt our logistics and alternative supply routes. Today, the brand of the state-owned company UMCC is returning to the EU markets and strengthening in the US. We already have contracts in place for about 135,000 tons, and the planned volumes are more than 200,000 tons,” said Perelyhin.

He added that the company’s branches – IGOK and VMMC – are currently fully loaded in accordance with their plans. The required categories of employees are booked and there are no salary arrears.

At the same time, all work to stabilize the company’s operations is carried out in close cooperation between management and the State Property Fund. As a result, current issues are addressed in a more comprehensive manner, which demonstrates effective results.

The United Mining and Chemical Company started its actual operations in August 2014, when the Government of Ukraine decided to transfer the property complexes of Vilnohirsk Mining and Metallurgical Plant (VGMK, Dnipropetrovska oblast) and Irshansk Mining and Processing Plant (IGOK, Zhytomyrska oblast) to its management. On December 8, 2016, the state-owned enterprise was transformed into PJSC UMCC, and on December 26, 2018, it was transformed from PJSC to PrJSC.

UMCC used to sell its products to more than 30 countries. The main sales markets were the EU, China, Turkey, as well as the USA and African countries.

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National Bank estimates cost of completing first stage of currency liberalization at $5.5bn

The steps announced by the National Bank of Ukraine in the near future to complete the first stage of currency liberalization may require about $5.5 billion in foreign exchange reserves, but are expected to significantly expand business opportunities, improve conditions for attracting investment and private capital participation in the restored and ultimately have a positive impact on economic dynamics, the press service of the National Bank of Ukraine said.

“Currency liberalization will cost $5.5 billion. This is necessary to give more oxygen to business and the economy,” the press service said, adding that these steps have already been taken into account in the updated forecast, which provides for the preservation of international reserves this year and next year at a level close to the current – $43-44 billion.

Representatives of the NBU specified that the completion of the first stage of liberalization includes the possibility of partial payment of new dividends, the removal of restrictions on the import of services, payment of leasing and rent, the possibility of payments on old loans and a number of easing for the work of volunteers and the purchase of goods for military needs.

At the same time, the central bank noted that individual proposals sounding today, for example, to increase the period of return of foreign currency proceeds from the export of basic agricultural products from 90 to 180 days or from 180 to 360 days – for the metallurgical industry may complicate the implementation of such liberalization.

The press service of the NBU added that by the fall of last year the overdue return of foreign currency proceeds exceeded $4.5 billion. According to representatives of the National Bank, the decision taken in mid-November on the return of foreign currency proceeds from major agro-exports within 90 days instead of 180 days had a positive impact on the foreign exchange market, including for the first quarter of this year, the inflow of foreign currency from agro-exports to the market reached $1.3 billion against $800 million in the first quarter of last year.

As reported, at the monetary briefing on April 25, the head of the NBU Andriy Pyshnyy announced in the near future steps on currency liberalization within the framework of the strategy agreed with the International Monetary Fund to ease currency restrictions.

“So far, we see grounds to complete the first stage, which provides for certain relaxations regarding new dividends, the abolition of the ban respectively on imports of services and currency liberalization of the possibility of servicing old debts. Currently, the National Bank is at the stage of finalization and final calibration of these decisions, which we intend to announce in the near future,” he said.

Taking into account the receipt of record external revenues of almost $9 billion in March, international reserves increased by 18%, or $6.7 billion – to a record $43 billion 762.7 million.