Milkiland, a dairy group with assets in Ukraine, Russia and Poland, saw EUR 11.39 million in net loss in January-September 2019, which is 15.1% more than a year ago.
According to a report of the group on the Warsaw Stock Exchange (WSE), consolidated revenue over the period slightly fell – by 2.3%, to EUR 96.57 million, and earnings before interest, taxes, depreciation and amortization (EBITDA) fell by 85.3%, to EUR 0.66 million.
In the nine months of 2019 Milkiland decreased its overall sales volumes by c. 29% on the back of significantly lower sales of cheese and butter products, which profitability were undermined by “the costs-prices scissors,” when the prices for finished goods lag behind the growing cost of the raw materials, namely, raw milk prices both in Russia and Ukraine. The prices for raw milk in Ukraine and Russia in January-September 2019 were by 9% and by 7.5% higher on average on year-over-year basis, respectively.
“Those unfavourable trends were aggravated by the situation with the appreciation on UAH and RUR against EUR in the reporting period,” the company said.
Due to the “scissors” effect and the growing completion in the Russian dairy market, first of all, in the market of the City of Moscow, Ostankino decreased the sales volumes of the whole-milk products by c. 9%, which led to decline of profitability of its business on EBITDA level by 6 pp. to practically zero on year-over-year basis.
Milkiland Ukraine in January-September 2019 focused on the development of sales of high value-added products, including innovative lactose-free cheese and whole milk products, primarily in the key accounts channel. As the result, this subsidiary of Milkiland managed to preserve its EBITDA margin almost at the same level of c.3% as in in January-September 2018.
Milkiland EU over the period faced a significant deterioration of the traditional business of the production and selling of dry milk products (WPC, permeate) triggered by non-favorable situation with the prices for these products in the global market, as well as declining sales of the cheese-mix products at the domestic market of Poland. As the result, the company generated losses at EBITDA level, which also decreased the overall EBITDA result of the group.
Milkiland Intermarket increased the sales of the group’s dry milk products in China and Kosher goods sales in Israel. The share of these two countries in the total sales of Milkland Intermarket exceeded 60%. The sales volumes of the dry milk products and butter by this company increased by c. 25% in January-September 2019 on year-over-year basis.
At the same time, growing input costs in Ukraine and revaluation of the Ukrainian currency against EUR and USD during the reporting period led to the situation, when the EBITDA margin of this increased sales slid to the negative territory.
The net profit of Astarta agricultural holding, the largest sugar producer in Ukraine, in January-September 2019 totaled EUR 4.3 million, which is almost 71% less than a year ago.
According to a company reported on the Warsaw Stock Exchange (WSE), its consolidated revenue grew by 31.6%, to EUR 333.6 million mainly driven by strong sales of agricultural produce. Export sales were up contributing 58% of the company’s revenues. Earnings before interest, taxes, depreciation and amortization (EBITDA) fell by 33.1%, to EUR 45.5 million, EBITDA margin from 27% to 14%. Gross profit fell by 34.4%, to EUR 57.1 million.
Revenues of the sugar segment stood at EUR 86.8 million (down by 10% year-over-year) on lower sales volumes and flat prices. Export sales share was 6% (16,000 tonnes).
The agricultural segment contributed 47% to the total revenues, or EUR 155 million, on 2.6-fold growth of corn sales volumes. Grain exports sales totaled 85% of segment revenue.
The soybean processing segment generated EUR 61.5 million of revenues (up by 15% year-over-year) on stronger sales volumes of key products. Some 89% sales were export sales.
Astarta said that the dairy revenues increased by 17% year-over-year to EUR 24.9 million as a result of better pricing environment. All revenue were received in Ukraine.
“Capex was reduced to maintenance levels across the segments apart from finalizing the EUR 61 million five-year investment project of completing 550,000 silo storage facilities in 2019,” the company said.
Astarta is a vertically integrated agribusiness holding operating in eight regions of Ukraine. The holding includes eight sugar factories, agricultural enterprises with a land bank of 243,000 hectares and dairy farms, a biogas plant and a soybean processing complex in Poltava region.
Sugar production in Ukraine as of November 14, 2019 amounted to 1.1 million tonnes.
According to the Ukrtsukor National Association of Sugar Producers, as of this date 31 sugar factories were operating in the country. To date, they have processed 7.3 million tonnes of sugar beets.
According to the information and analytical portal of the agro-industrial complex, as of November 12 farmers had harvested 9 million tonnes of sugar beets from 205,000 ha (93% of the forecast for the area).
As reported, the sugar production season in Ukraine started on September 1. According to the estimates of Ukrtsukor, sugar production in the 2019/2020 season may reach 1.1-1.2 million tonnes.
Sugar production in the 2018/2019 season decreased by 15% compared with the previous MY, to 1.82 million tonnes.
National bank of Ukraine’s official rates as of 18/11/19
Source: National Bank of Ukraine
Official rates of banking metals from national bank as of November 18
One troy ounce=31.10 grams
UDP Renewables has launched a photovoltaic power plant in Pervomaysk, Mykolaiv region.
“Pervomaysk” PV PP occupies an area of 12,3 hectares, with more than 19,7 thousand solar panels (330W of capacity) installed by Jinko Solar, the world’s biggest manufacturer of solar panels. This amount of panels can generate almost 7600 MWh of electricity per year. This is sufficient to meet the needs of 3,250 households.
“During the first nine months of this year, the capacity of renewable energy in Ukraine has doubled. We and our partners believe that the further growth of the share of renewables in the country’s energy mix is strategically important and we ensure that energy production at our stations is in line with the world’s best practices,” Vasyl Khmelnytsky, founder of UFuture, said.
Operation of “Pervomaysk” PV PP will allow to reduce carbon dioxide emissions up to 11 thousand tons per year.
“Our team has made significant efforts to launch “Pervomaysk” PV PP. This project is another contribution to the implementation of the National Energy Strategy. By the end of 2019, Ukraine will reach 4% share of renewables in the total electricity production. We are grateful to our partners — KNESS group of companies, Everlegal law firm, and the financial partner, JSB “Ukrgasbank”, for the support in the implementation of the project,” Sergiy Yevtushenko, co-founder and managing partner of UDP Renewables, said.
During the construction, 125 jobs have been created at the station. The general contractor has been KNESS.
ADDITIONAL INFORMATION
UDP Renewables is an investment and development company in the Ukrainian renewable energy sector. With diversification in type of renewable power generation and geography, by 2022 UDP Renewables strives to become one of the largest producers of clean energy in Ukraine, with total capacity of more than 300 MW.
UFuture, a holding company of Ukrainian entrepreneur, Vasyl Khmelnytsky, that integrates his business and impact-investment projects, is a strategic investor of UDP Renewables. UFuture has a diversified portfolio of assets in the fields of real estate, infrastructure, industry, renewable energy, pharmaceuticals, and IT. Currently, UFuture’s assets are estimated at $550 million, and the total capitalization of the businesses it invested in is more than $1 billion.
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