Business news from Ukraine

Business news from Ukraine

BORYSPIL AIRPORT SEES RISE IN PASSENGER FLOW IN JAN-APRIL

The Boryspil international airport (Kyiv) in January-April 2019 increased passenger flow by 17.2% from a year ago, to 3.81 million, the press service of the airport has told Interfax-Ukraine.
At the same time, the passenger traffic on international flights amounted to 3.493 million people (growth by 18.3%), on domestic – 316,800 (growth by 6.5%).
In general, in January-April, the airport serviced 30,559 flights (an increase of 10.1%), including 26,480 international and 4,079 domestic.
For the first four months of 2019, on regular flights, the Boryspil airport serviced 3.142 million people (a rise of 22% over the same period in 2018), on irregular flights – 667,790 people (at the level of the same period last year).
The number of transfer passengers since the beginning of 2019 amounted to 964,760, which is 6.2% higher than the figure for the same period of 2018. The share of transfer passengers in the total passenger traffic was 25.3% (a decrease of 2.7 percentage points).
In April of this year, the passenger traffic of Boryspil amounted to 1.155 million people, which is 22.4% more than in April last year.
Passenger flow on international flights in April was 1.07 million passengers (an increase of 24.7%), on domestic flights – 84,800 (a decrease of 0.6%).
In general, in April, the airport served 8,661 flights (an increase of 14.7%), including 7,592 international and 1,069 domestic.

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HARVEST, QUALITY OF SUGAR BEETS TO BE LOWER THAN PROJECTED DUE TO HEAVY RAINS

The harvest and quality of sugar beets in 2019 will be lower than expected due to extra moisture of upper layers of soil and high air humidity caused by heavy rains, the press service of the Ukrtsukor national association of sugar producers has said.
According to the association, rains washed out part of the sugar beet crops, and high humidity contributes to the development of plant diseases. In addition, heavy rains are washing out nitrogen from the soil, as a result of which the growth and development of sugar beet deteriorates.
“Taking into account all the factors, we can predict that the sugar content and yield will be lower than the expected level, which, in turn, will affect the production of sugar. According to our forecasts, this year we will be able to get within 1.1-1.2 million tonnes of sugar. This volume can create a certain shortage in the market,” the association said.
As reported, according to the previous forecast of Ukrtsukor, the production of sugar was projected at the level of 1.3-1.4 million tonnes (a fall of 23-29% compared with 2018).
According to the Ministry of Agricultural Policy and Food of Ukraine, as of May 13, 2019, 217,400 hectares of sugar beet were sown (88.9% of the forecast).

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NBU STARTS STRESS TESTING OF 29 BANKS

The National Bank of Ukraine (NBU) has started the second stage of the resilience assessment of banks – the asset quality review (AQR) confirmed by an external auditor and started stress testing of 29 banks, according to a survey of the banking sector posted on the website of the NBU.
According to preliminary estimates, the number of banks requiring capital injections in the baseline and negative stress test scenario will decrease compared to the previous year, the central bank said in the survey.
As the regulator recalled, by the end of 2019, banks need to form a capital conservation buffer in the amount of 0.625%. It will become mandatory for each bank from the beginning of 2020, when the first stage of the introduction of the capital conservation buffer will begin. In the future, the size of the buffer will increase gradually every year and will reach 2.5% from January 1, 2023. The formation of the corresponding buffer will ensure that banks create a stock of capital in excess of the minimum requirements. In the future, this will provide an opportunity of absorbing the possible losses that may arise in a general economic recession, without violating the capital adequacy ratio.
The NBU also announced that during the second quarter the method for determining systemically important banks will be changed and an updated list of such banks will be made public. In the future, the NBU will require them to form a buffer of system importance.
As reported, in 2019, 29 banks that account for 93% of the banking system will undergo stress testing in addition to the AQR. These 29 banks were rated as the largest ones as of November 1, 2018 by three indicators: risk-weighted assets, retail deposits, and retail loans.
The following banks will be tested: state-owned PrivatBank, Oschadbank, Ukreximbank and Ukrgasbank, private Alfa-Bank, Raiffeisen Bank Aval, FUIB, UkrSibbank, OTP Bank, Credit Agricole Bank, Pivdenny Bank, TAScombank and Kredobank. The list also includes Sberbank, ProCredit Bank, Ukrsotsbank (the results of stress testing for the bank will be assessed taking into account the dynamics of its joining Alfa-Bank), Megabank, Credit Dnipro Bank, Universal Bank, A-Bank, Prominvestbank, Idea Bank, Bank Vostok, MTB Bank, Bank of Investments and Savings, Industrial Bank, Bank Globus, International Investment Bank and Bank Forward.
According to the resilience assessment findings, the regulator will determine the required levels for the regulatory capital adequacy ratio (N2) and the common equity adequacy ratio (N3). The required level of the capital adequacy ratios will be estimated in order to ensure banks’ compliance with the minimum requirements of N2 and N3 according to the baseline scenario (10% and 7%, respectively) and less strict requirements to the said ratios under the adverse scenario (5% and 3.5%, respectively) throughout the entire forecast period.
In 2018, the NBU has launched resilience assessment of banks that includes stress testing a list of banks defined by the NBU.

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ENERGOATOM INCREASES POWER GENERATION IN JAN-APRIL

National Nuclear Generating Company Energoatom increased power generation by 9.9% year-on-year in January-April 2019, to 30.365 billion kWh, the company has said.
The electricity generation target was met by 100.3%.
Electricity sales totaled 22.294 billion kWh compared to 28.643 billion kWh in January-April 2018. Energoatom’s share of total electricity sold to Energomarket state enterprise was 56%, and the share of total electricity generation in the country was 54%.
The company sold electricity worth UAH 19.771 billion (including VAT) on the wholesale power market, which is 15.6% more than in January-April 2018.
Capital investment totaled UAH 2.112 billion compared with UAH 2.739 billion in January-April 2018.
The company sent UAH 5.637 billion to the budgets of all levels and insurance payments came to UAH 880 million.
Capacity use was 76%, which was 6.9 p.p. more than a year previously.
Five malfunctions were recorded at Ukrainian nuclear power plants in the reporting period, two less than a year ago. Radiation levels at Ukrainian NPPs were normal over the period.
Energoatom is the operator of all four Ukrainian-based operating nuclear power plants, which have 15 VVER reactors with an overall generating capacity of 13.835 gigawatts.
The company also operates the Tashlyk hydroelectric pumped storage power plant with a 302 MW capacity in a turbine mode and Oleksandrivka hydropower plant with an 11.5 MW capacity.

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UTG CONSULTING COMPANY BECOMES EXCLUSIVE BROKER OF APPOLO MALL IN DNIPRO

UTG consulting company (Kyiv) has signed an exclusive brokerage contract for the second line of the Appolo shopping mall in Dnipro. “Currently, UTG is looking for tenants for the second line of Appolo. The second line of the mall, located on the 36, Titova Street includes three levels with a total area of 40,000 square meters, 30,000 square meters of which are for leasing. The launch is planned in Q3 2019,” UTG said.
According to the concept developed by the company’s specialists, the facility will store a food supermarket with an area of 4,400 square meters, a cinema of 3,000 square meters, operators of goods for children, a fashion gallery, a large area of restaurants and food courts.
“After the launch of the second line, it is planned that the daily attendance of the shopping mall will be 20,000 people per day. Thus, it will become one of the most visited and popular commercial properties in Dnipro,” Director at UTG Yevhenia Loktionova said.
UTG (Kyiv) was founded in 2011. Its core business is accompanying of development projects.
More than 100 real estate projects were launched with the participation of UTG. Among them are Lavina Mall, New Way, Ocean Plaza, Gulliver, Piramida and Komod shopping centers (all based in Kyiv), Megamall (Vinnytsia), Most City Center (Dnipro), French Boulevard (Kharkiv) and Global.UA shopping centers (Zhytomyr).
According to the unified public register of legal entities and individual entrepreneurs, as of April 1, 2019, the share of 30% in the share capital of UTG LLC (Kyiv) belongs to Melnyk, 65% to Vadym Neposedov, and 5% to Artem Neposedov.

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