Ovostar Union, a vertically integrated holding company, one of the leading producers of eggs and egg products in Ukraine, increased its livestock to 7.7 million heads in 2023, including 6.4 million laying hens, compared to 7.2 million and 6.0 million a year earlier.
“In 2023, the company focused on the gradual restoration of the livestock, which resulted in a 7% increase in the number of chickens. Efforts have also been made to restructure the product portfolio and sales channels to achieve greater efficiency,” Ovostar CEO Boris Belikov said in a stock exchange announcement.
He noted that, given the fairly successful solution of these problems, the management is satisfied with the group’s performance.
It is indicated that the volume of egg production in 2023 decreased by 1% to 1 531 million, and sales in the shell egg segment decreased by 10% to 970 million.
At the same time, Ovostar indicated that the volume of egg exports increased by 18.6% to 344 million units, accounting for 35% of total sales in the segment, compared to 27% in 2022.
According to the report, in 2023, the volume of egg processing amounted to 492 million eggs, which is 15% higher than the previous year. At the same time, the production of dry egg products decreased by 1% to 2.512 thousand tons, while the production of liquid egg products increased by 20% to 12.998 thousand tons.
It is specified that the volume of sales of dry egg products increased by 15% to 2,468 thousand tons, including exports – by 17.2% to 1,695 thousand tons, which increased its share to 69% from 68%.
Sales of liquid egg products in 2023 increased by 20% compared to 2022 and amounted to 12.828 thousand tons, including exports – by 19.8% to 5.17 thousand tons, which maintained its share at 40%.
As reported, Ovostar earned $29.08 million in net profit in 9M2023, which is 12.2 times better than in the same period of 2022. Its revenue for the first nine months increased by 36.3% to $123.06 million, mainly due to higher prices for its products.
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.
Ovostar Union, one of the leading producers of eggs and egg products in Ukraine, increased sales of its main products in dollar terms by approximately 42.4% in 9M2023 due to higher prices for eggs and liquid egg products and increased sales of liquid egg products.
According to the operational report on the Warsaw Stock Exchange on Thursday, compared to 9 months of last year, the number of eggs produced was 3.5% less – 1,148 million, of which 734 million eggs were sold in shells (-10.9%). At the same time, exports in the egg segment increased to 280 million from 223 million, and its share in egg sales rose to 38% from 27%.
At the same time, the average selling price of shell eggs in dollar terms increased to $0.114/egg from $0.076/egg a year earlier.
According to the report, during the reporting period, Ovostar increased egg processing by 4.4% to 354 million eggs. The output of dry and liquid egg products amounted to 1906 tons and 9374 tons, respectively, while a year earlier this figure was 2239 tons and 7609 tons.
Sales of dry egg products amounted to 1822 tons, up 13.1% year-on-year, of which 1300 tons, or 71%, were exported, compared to 1083 tons and 67%, respectively, a year earlier.
Sales of liquid egg products increased by 20.4% to 9,053 tons, of which 44% or 3,986 tons were exported, while in the first nine months of 2022 Ovostar exported 41% of its liquid egg products, or 3,117 tons.
It is specified that the average selling price of dry egg products decreased slightly to $8.59/kg from $8.63/kg in January-September 2022, while the average selling price of liquid egg products increased by 31% to $2.40/kg.
These figures bring the sales volume of main products in January-September this year to $168.3 million, which is 42.4% higher than in January-September 2022. Sales growth was 56.1% in the first half of the year and 68.1% in the first quarter.
The company also reported an increase in the number of poultry by 8.5% to 7.42 million, including laying hens by 9.2% to 6.28 million.
“Despite the ongoing war in Ukraine, the Group managed to increase its livestock by 8% year-on-year in the first 9 months of 2023. The management is working to bring the production and sales structure in line with the market situation, which has led to good operating results,” commented Boris Belikov, CEO of the company.
As reported, in 2022, Ovostar reduced its egg production by 9% to 1.55 billion eggs, and sales by 6% to 1.08 billion eggs. At the same time, sales of dry egg products decreased by one third to 2.13 thousand tons, and liquid egg products by 26% to 10.62 thousand tons.
In 2022, the company earned $6.09 million in net profit, which is 3.7 times more than in 2021. Its revenue increased by 1.7% to $135.63 million last year.
In the first half of 2023, Ovostar 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 first six months of this year increased by 56.8% to $88.69 million, mainly due to higher prices for its products.
Prime One Capital Limited, the majority shareholder of Ovostar Union, controlled by CEO Boris Belikov and Chairman of the Board of Directors Vitaliy Veresenko, has reduced its stake from 67.93% to 65.93% of the authorized capital.
According to the agricultural holding’s announcement on the stock exchange, the deal to sell 120 thousand shares took place on September 29 at a price of PLN70 per share ($15.87 at the current exchange rate), while the current exchange rate is PLN61.5 per share.
It is specified that Prime One Capital now owns 3 million 956.046 thousand shares.
As reported, the international insurance group Fairfax Financial Holdings (Canada) increased its stake in Ovostar from 17.499% to 27.51% following the transaction on September 13, while the pension fund Generali OFE managed by Generali Powszechne Towarzystwo Emerytlane S. A., which owned 10.93% of the shares.
In this regard, the shares of Ovostar, one of the leading producers of eggs and egg products in Ukraine, were excluded from the list of index participants after the September 26 session: WIG, WIG-CEE, WIG-food and WIG-Ukraine.
“Ovostar no longer meets the criteria of the above indices, as the share of its shares in free-float is less than 10%,” GPW Benchmark said.
As a result, only six issuers remained in the WIG-Ukraine country index, with two accounting for more than 80% of the index basket: “Astarta – 47.083% and IMC – 34.888%, while Ovostar’s share before the exclusion was 19.158%.
The WIG-Ukraine index began to be calculated on May 4, 2011. The base level of 1000 points was taken as December 31, 2010. The WIG-Ukraine is a total return index, so its calculation takes into account both share prices and income from dividends and subscription rights. The index currently stands at 246.6 points.
“In mid-June 2011, Ovostar Union conducted an IPO of 25% of its shares on the WSE at PLN62 per share and raised $33.2 million.
In the first half of 2023, the holding earned $20.63 million in net profit, while it ended the same period in 2022 with a net loss of $19.78 million. Revenue increased by 56.8% to $88.69 million, mainly due to higher prices for its products.
Ovostar Union, one of the leading producers of eggs and egg products in Ukraine, earned $20.63 million in net profit in the first half of 2023, while the same period in 2022 ended with a net loss of $19.78 million.
According to the group’s report on the Warsaw Stock Exchange, its revenue for the six months increased by 56.8% to $88.69 million, mainly due to higher prices for its products.
Gross profit in the first half of this year amounted to $26.99 million against a gross loss of $10.39 million last year, operating profit – $20.12 million against a loss of $17.57 million, and EBITDA – $21.7 million against a negative $15.5 million in the first half of last year.
It is indicated that such an increase in profitability was also achieved by reducing the cost of sales by more than half – from $47.8 million to $23 million – due to good feed prices and the devaluation of the hryvnia.
The group also reported that its total debt for the year decreased from $12.5 million to $2.5 million, while free cash flow increased from $3.7 million to $50.3 million, including $0.5 million to $24.7 million in Ukraine (including the equivalent of $7.6 million in hryvnia), $3.1 million to $21.2 million in Lithuania, and $0.02 million to $4.2 million in the UAE. As a result, the net debt increased from $8.8 million to negative $47.9 million. In particular, Ovostar has fully repaid its loans to Ukrsibbank and OTP Bank for $8.5 million.
According to the report, the share of egg sales in revenue decreased to 70% from 74% in the first half of last year, while the share of egg products increased from 26% to 30%. At the same time, the share of egg exports in total revenue increased from 23% to 36%, and the share of egg products exports increased from 13% to 18%.
“Against the backdrop of the ongoing Russian military invasion of Ukraine and the overall unfavorable situation in the national economy, the management decided to suspend the investment program,” the document also says.
As specified, in the reporting period, only minor investments were made in production facilities and infrastructure, amounting to $5.8 million compared to $4.3 million in the first half of 2022.
In the first half of this year, Ovostar withdrew from the International Food Trade company (British Virgin Islands).
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 in the company 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 2022, Ovostar earned $6.09 million in net profit, which is 3.7 times more than in 2021. At the same time, revenue increased by 1.7% to $135.63 million.
In the first quarter of 2023, the group earned $8.98 million in net profit, while the same period in 2022 ended with a net loss of $16.44 million. Its revenue for the period increased by 70.7% to $47.30 million.
Agro-industrial group Ovostar Union, one of the leading producers of eggs and egg products in Ukraine, in the first half of 2023, despite a decrease in egg processing by 8%, increased sales of its main products by about 56.1% due to higher prices and increased sales of egg products.
According to the company’s report on the Warsaw Stock Exchange, the average price of eggs in January-June 2023 increased 67% year-on-year to $0.127/egg.
Egg sales fell 11.6% to 478 million eggs, while export egg sales jumped 62.5% to 208 million eggs and the share of exports in this segment rose from 24% to 43%, the document said.
According to it, the volume of egg processing in the first half of 2023 decreased by 1% to 213 million pieces: the company reduced production of dry egg products by 26.1% to 1,050 tons, but increased production of liquid ones by 31.3% to 6,232 tons.
At the same time, sales of dry egg products increased by 57.7% to 1,219 tons, while sales of liquid products increased by 33.8% to 6,083 tons.
Exports of dried egg products jumped 106.6% to 878 tons, while exports of liquid products jumped 50.8% to 2,801 tons, bringing their share of sales in these segments to 72% from 55% and 46% from 41%, respectively.
The average price of dry egg products increased by 10% to $8.78/kg, while the average price of liquid egg products increased by 39% to $2.55/kg.
It is noted that overall, Ovostar reduced egg production in the first half of 2023 by 8% against the first half of 2022 to 732 million eggs, but the number of hens increased by 16.6% to 7.3 million in the year to June 30, including laying hens up 5.8% to 6.54 million.
“Production and sales plans have been aligned with current market conditions both in Ukraine and abroad, resulting in a reasonable balance between local and export revenues. Overall, the administration is pleased with the group’s operating performance for the first six months of the year,” the release quotes a comment from the company’s CEO Boris Belikov.
He noted that in the first half of 2023, the group continued to operate in a business environment affected by the ongoing Russian armed aggression, but the management took all possible steps to mitigate war-related risks, with a focus on creating a safe working environment for staff.
As reported, in 2022, Ovostar reduced egg production by 9% to 1.55 billion eggs and sales by 6% to 1.08 billion eggs. At the same time, sales of dry egg products decreased by a third to 2.13 thousand tons, liquid – by 26% to 10.62 thousand tons.
The company earned $6.09 million in net income in 2022, 3.7 times more than in 2021. Its revenue for last year increased 1.7% to $135.63 million.
“In the first quarter of 2023, Ovostar decreased egg production by 2% to 362 million eggs, but increased its sales by 4% to 241 million eggs,” the company said. At the same time, sales of dry egg products increased by 23.8% to 531 tons, while sales of liquid egg products increased by 40.3% to 3,063 tons.
Given these sales and pricing metrics, total revenue for the three product categories was estimated at $46.3 million, up 68.1% from $27.6 million in the first quarter of last year.
As a result, the company reported a 70.7% increase in revenue to $47.30 million and a net income of $8.98 million instead of a net loss of $16.44 million in the first quarter of 2022.
