The Antimonopoly Committee of Ukraine (AMC) continues to consider the case on government aid to PrJSC Philip Morris Ukraine, opened on January 3, 2020 due to an appeal from one of its competitors.
According to the information released on the committee’s website, in autumn of 2019, the committee received an application from one of the tobacco producers to verify information on illegal government aid due to the cancellation of the tax obligations previously determined for Philip Morris Ukraine by the State Fiscal Service.
The cancellation of tax obligations is one of the forms of government aid due to the law on government aid to business entities.
“Having received the application, the committee sent a request to the State Fiscal Service in accordance with the law. However, in response, the service provided explanations on the facts of tax obligations cancellation, but did not submit the necessary statement, which is a direct basis for initiating a government aid case,” the committee said.
Currently, the committee is analyzing the information provided by the parties of the case and other persons to make a decision. The committee also drew attention to the fact that the initiation of a government aid case is not the final conclusion about its admissibility or inadmissibility.
Philip Morris International is one of the world’s largest manufacturers of tobacco products. It produces cigarettes in more than 50 factories, sells them in 180 countries.
In Ukraine, the company has been operating for more than 20 years. It manufactures products in a factory in Kharkiv region.
The net profit of Myronivsky Hliboproduct agricultural holding (MHP) in 2019 increased by 1.7 times compared to 2018, to $215 million.
According to a company report on the London Stock Exchange’s website, its revenue last year increased by 32%, to $2.06 billion, due to the increased sales of chicken, vegetable oil and semi-finished products, as well as the purchase of PP.
Export revenue amounted to $1.19 billion, which is 58% of total revenue (60% in 2018). Export revenue increased by 28% compared to 2018 due to the growth in sales of grain, vegetable oil and meat products.
Last year, MHP’s gross profit decreased by 6%, to $398 million, operating profit by 31%, to $216 million.
The agricultural holding’s EBITDA in 2019 decreased by 16%, to $376 million, EBITDA margin to 18% from 29%. This was due to low prices (both for crops and chicken), adverse weather conditions and the significant strengthening of the hryvnia.
For the fourth quarter of 2019, MHP increased its net loss by 4.3 times, to $60 million compared to the same period in 2018. Revenue for this period increased by 43%, to $551 million. Export revenue amounted to $316 million, which is 57% of total revenue.
MHP’s operating losses in October-December 2019 amounted to $2 million compared to $29 million in operating profit in October-December 2018. Gross profit decreased by 22%, to $52 million.
EBITDA margin in the fourth quarter of 2019 fell to 8% from 23%, EBITDA by 51%, to $43 million.
The National Commission for the State Regulation of Financial Services Markets, on April 9, entered the information on double liability company Gestalt Group (Kyiv) into the public register of financial institutions, the commission has said on its website.
According to the unified public register of legal entities and private entrepreneurs, the company was registered in February 2019 with charter capital of UAH 34 million. It specializes in risk insurance and reinsurance.
The founders of the company were Gestalt Finance LLC (Kyiv) with contribution of UAH 33.660 million, PrJSC Arton-Megacity, Andriy Antonenko and Yuriy Khandashko, who is also the head of the company.
According to the public register of legal entities and private entrepreneurs, Gestalt Finance LLC was registered in March 2019 with charter capital of UAH 10,000. The founder is PrJSC Arton-Megacity and Antonenko.
KSG Agro agricultural holding intends to achieve a 15% increase in pig breeding in live weight for 2020 compared to 2019.
“Increasing production is our strategic goal. Moreover, the market situation and increasing demand contribute to this. Therefore, our plans this year are to increase pig breeding products in live weight by 15% compared to the same indicator in 2019,” KSG Agro Board Chairman Serhiy Kasyanov told Interfax-Ukraine.
According to him, the agricultural holding did not revise investment plans for 2020 due to quarantine and the uncertain economic situation in Ukraine.
“These plans are valid and we did not change them. The planned investment for the year to continue the reconstruction of the main industrial complex and the start of the design of the genetic reproducer will be about UAH 25 million. The genetic reproducer will produce Danish boars and sows, which will allow us to reduce costs and start sales to other customers,” the owner of KSG Agro said.
Kasyanov said that in 2020 the holding plans to increase exports of manufactured products.
“In the first quarter of this year, we exported 1,356 tonnes of wheat flour to Libya. Export volumes are growing. For comparison, we shipped 720 tonnes of wheat flour for 2019. So far, despite the crisis, we plan to increase the export of our products. In the second quarter we intend to export 2,000 tonnes of wheat flour, some 1,000 tonnes of barley, some 500 tonnes of refined sunflower oil and some 1,000 tonnes of other goods,” the KSG Agro board chairman said.
KSG Agro, a vertically integrated holding, is engaged in pig breeding and production, storage, processing and sale of grain and oilseeds. As of June 30, 2019, the land bank of the holding in Ukraine amounted to about 27,000 hectares.
Umanpyvo (Uman beer) LLC (Uman, Cherkasy region), the local producer of beer and soft drinks, will begin exporting its products to Belarus, and the first batch of 21.5 tonnes of products will be delivered in April.
“The first 21.5 tonnes of products will be delivered in April. We are constantly expanding the geography of exports. However, we only cooperate with partners who do not require changes in the recipe and increase expiry date of our products, as this contradicts the principles of Umanpyvo,” the company reported in a press release, citing the company’s CEO Ihor Kysil.
According to the company, Umanpyvo is trying to find new partners, negotiate, adapt packaging to the requirements of legislation of specific countries, and obtain all the necessary certificates during the quarantine period because of coronavirus (COVID-19) pandemic.
Now the company is negotiating with potential new partners from Kazakhstan, Latvia, Lithuania, Estonia, Georgia, Armenia, Germany, the United States, Canada, and also plans to expand its participation in the markets of Poland and Israel.
Umanpyvo representatives said that the company began to enter foreign markets in 2018. During this time, point deliveries were provided to ten countries, as well as regular export to Poland and Israel.
Umanpyvo (Uman beer) is a Ukrainian local producer of beer, cider and soft drinks with a closed production cycle.
Uman Brewery was founded in 1878.
Ovostar Union, a leading egg and egg products manufacturer in Ukraine, supplied 466,000 eggs or 40 tonnes to Israel in April, which is 0.003% of its monthly production volume, the company’s press service has told Interfax-Ukraine.
“Israel is a country with high requirements for safety and quality of food, and we are proud that our products passed the control of the Israeli veterinary service, and we have the opportunity to supply eggs to this market. Israel is currently experiencing a shortage of this product, and, in addition to Ukraine, buys eggs in other European countries. On April 1, 2020, the Israeli Veterinary Service allowed producers of table eggs from Ukraine to export them to the country,” the company said.
Ovostar Union said that the company has been consistently implementing its export development strategy since 2015. Ovostar products are delivered to 55 countries, including to the markets of the EU, the Middle East, Southeast Asia and Africa. The export volume in 2019 amounted to an average of 43 million units per month, in 2018 – 48 million units per month.
Ovostar, citing the State Statistics Service, reported that the production of industrial eggs in Ukraine is growing annually, and in January-February 2020, egg production by specialized enterprises increased 8.6% compared to the same period in 2019.
“At the same time, the volume of the domestic market, taking into account the significant share of eggs collected by households, remains almost unchanged. The egg is one of the key export goods of the agricultural sector of Ukraine. With an average monthly production of 780 million pieces by poultry farms in general, 190 million eggs are exported, making our country one of the key players in the global egg industry,” the company said.
Speaking about the company’s work during the coronavirus disease (COVID-19) pandemic in Ukraine, Ovostar said that since the introduction of quarantine restrictions, the company, despite the additional costs of ensuring sanitary standards at enterprises, exchange rate fluctuations and rising cost of feed, has not changed selling prices for packaged products delivered to retail chains.
