In January-June of this year, the international vertically integrated pipe and wheel company Interpipe reduced its net profit by about 74.4% compared to the same period last year, to $29.431 million from $115.529 million.
According to the company’s interim report on operating and financial results for the second quarter and the first half of 2021, pre-tax profit in January-June decreased 58.3%, to $50.766 million from $123.495 million in the same period in 2020.
At the same time, operating profit halved – to $62.847 million from $128.058 million.
Interpipe received $111.209 million EBITDA in the first half of this year, which is 25.4% less than the same period last year ($148.980 million). The company’s revenue during this period decreased by 1.7%, to $460.471 million, while capital investments increased by 66%, to $31 million.
In addition, Interpipe increased its free funds from $96.631 million at the beginning of this year to $206.008 million by the middle of the year. In the same period last year, Interpipe reduced free funds from $256.148 million (at the beginning of 2020) to $186.790 million (as of mid-2020).
As reported in the company’s press release, Interpipe’s net debt at the end of the first half of 2021 was $199 million, while the net leverage ratio (net debt to EBITDA) remained stable at 0.9x.
In the second quarter of this year, revenue increased by 29% compared to the previous quarter, to $260 million, EBITDA increased by 75%, to $71 million, and the amount of capital investments increased by 20%, to $14 million.
Capex in new projects tripled year over year, to $21 million.
As of June 30, 2021, the company’s total debt increased to $199 million following the successful placement of a new $300 million eurobond issue with a rate of 8.375% maturing in 2026. The net leverage ratio remained stable at 0.9x.
Interpipe in January-March this year reduced its net profit by 90.4% compared to the same period last year, to $12.826 million from $133.064 million. In the second quarter, revenue decreased by 19.9%, to $200.952 million, EBITDA – by 53%, to $40 million, the amount of capital investments increased by 58%, to $17 million. Net debt was $53 million with the net leverage ratio of 0.2x. As of March 31, 2021, the company’s total debt fell to $110 million following the full redemption of the 2024 eurobonds on January 26, 2021, keeping the net leverage ratio low at 0.2x.
Interpipe is a Ukrainian industrial company, a manufacturer of seamless pipes and railway wheels. The company’s products are supplied to more than 80 countries all over the world through a chain of commercial offices located in the CIS, Europe, the United States and the Middle East.
NJSC Naftogaz Ukrainy plans to end 2021 with a net profit, CEO Yuriy Vitrenko has said.
“We are doing everything to show that, in the results of this year, Naftogaz is no longer a loss-making company and is financially stable,” he told Interfax-Ukraine on the sidelines of the YES Brainstorming 2021 forum in Kyiv on Friday.
Vitrenko recalled that the stability of Naftogaz largely depends on the solvency and financial discipline of its counterparties to whom it sells natural gas: thermal energy enterprises, industrial and household consumers.
In addition, the financial activities of Naftogaz are also influenced by the results of Gas Transmission System Operator of Ukraine (GTSOU), on which the dynamic payments of Mahistralni Gazoprovody Ukrainy (MGU) for the infrastructure transferred at the end of 2019 depend.
“The situation when a critical element of the infrastructure – GTSOU – incurs losses that are not replenished, for example, due to unauthorized selections or nonpayment for balancing services, is not normal,” Vitrenko said.
“Naftogaz has enormous problems associated with the fact that the entire industrial chain was financially unstable. Our task is precisely to make sure that, on the one hand, the entire market can develop financially sustainably, and on the other hand, Naftogaz is a financially stable company. which can increase production and really ensure, and not at the level of declarations, the country’s energy security,” he said.
The agro-industrial group of companies Ovostar Union, one of the leading producers of eggs and egg products in Ukraine, in January-June 2021 received $1.62 million in net profit, which is 34% less than in the same period in 2020, its EBITDA decreased by 27% – up to $3.5 million.
According to the company’s report, published on the website of the Warsaw Stock Exchange on Friday evening, Ovostar’s revenue in the first half of 2021 increased by 37.6% to $61.42 million, its gross profit decreased by 13.8% to $6.24 million, operating profit doubled to $1.37 million.
“Since the third quarter of 2020, the Ukrainian egg industry has been decreasing in terms of the total number of laying hens and production volumes. A poor harvest last year led to an increase in the prices of the main components of the feed mixture, which subsequently increased the cost of production. This, along with the very unfavorable dynamics of the selling prices for eggs, caused huge losses to the industry. Many egg producers are cutting their herds,” the report says.
The report indicates that the company’s net debt as of June 30, 2021 increased by 20% compared to the same date last year, to $8.9 million, while the total volume of new or refinanced loans amounted to about $4.0 million. Long-term debt of Ovostar’s liabilities as of the indicated date increased by 43.2% – to $7.15 million, and the current ones – by 47.1%, to $23.86 million.
The total amount of the company’s assets as of June 30, 2021 increased by 8% compared to the same date in 2020 – to $141.2 million, mainly due to an increase in the fair value of Ovostar’s biological assets.
“Against the backdrop of the COVID-19 pandemic and the general unfavorable situation in the agro-industrial complex, it was decided to focus on operational efficiency and suspend the investment program until further notice. Thus, in the reporting period, only minor investments were made in production capacity and infrastructure,” the message says.
In January-June 2021, the KSG Agro agricultural holding increased its net profit 48 times, year-over-year, to $13.7 million, of which the group of companies received $12.86 million through the sale of a number of its assets.
According to the holding’s statement on the website of the Warsaw Stock Exchange on Sunday, its revenue for the specified period decreased by 12%, to $6.81 million.
“In May 2021, the group sold its subsidiaries Soyuz-3 LLC, Agrofirma Vesna LLC, UAIH Trading House LLC. Agrofirma Vesna LLC and UAIH Trading House LLC are inactive organizations. Soyuz-3 LLC is a production organization engaged in crop production, but acquired with large commitments and remains outside the group’s ownership structure until such obligations are settled,” the company said in a statement.
It is specified that proceeds from the disposal of the subsidiary company Soyuz-3 LLC (Novopokrovka, Dnipropetrovsk region) from the agricultural holding amounted to $6.5 million, UAIH Trading House LLC some $4.27 million, Agrofirma Vesna LLC some $2.01 million.
KSG Agro for the reporting period reduced gross profit by 27%, to $2.48 million, operating profit by 28%, to $1.89 million, its EBITDA decreased by 22%, to $2.69 million.
According to the statement, the company in the first half of the year reduced profit in the crop segment by 37%, to $1.46 million, in the livestock segment by 19.4%, to $ 700,000, while in the segment “other operations” (production of fuel pellets and heat energy) increased by almost 44.5%, to $310,000.
“In 2021, the group started a project to gradually renew the sow population in Ukraine to increase the birth rate of piglets. To this end, the group is negotiating with Suisag, a Swiss pig genetics company, and Genesus, a Canadian genetic company. As of the date of these financial statements, the group expects to receive first batches of sows from Genesus,” the company said in the statement.
The agricultural holding said in the report that it is considering an international investment project with several partners to build a breeding pig farm in Kazakhstan for 50,000 pigs with an estimated total cost of EUR 30 million.
At the same time, KSG Agro said the total debt of the group of companies in U.S. dollars as of June 30, 2021 decreased by almost 44.5%, year-over-year, to $15.3 million, while it increased from UAH 82,000 to UAH 14.8 million
“In 2020, the group has already managed to increase its net current assets from negative $23.5 million as of January 1, 2020 to negative $6.3 million as of December 31, 2020. The group plans to complete the second phase of the process by the end of 2021, bringing net current assets to a positive value. As of June 30, 2021, the total balance of ‘other financial liabilities’ compared to December 31, 2020 decreased even more,” the group said.
According to the report, the majority shareholder and head of the board of directors of the agricultural holding KSG Agro Serhiy Kasianov, who owns it through Olbis Investments Ltd. (Panama), on August 2, sold 1 million shares (6.66%) of the group of companies to two legal entities with Polish jurisdiction, after the transaction, the share of Olbis Investments Ltd. amounted to 57.96% of the charter capital.
The vertically integrated holding KSG Agro is engaged in pig breeding, as well as in the production, storage, processing and sale of grain and oilseeds. Its land bank is about 21,000 hectares.
According to the agricultural holding itself, it is one of the top five pork producers in Ukraine.
The net profit received by agricultural, forestry and fisheries enterprises in 2020 amounted to UAH 81.1 billion (11% down compared to 2019), this value exceeded the profitability indicators of other types of economic activity in Ukraine, the National Scientific Center Institute of Agrarian Economics (IAE) said on its website on Tuesday.
“Last year, 82.6% of enterprises in the industry saw UAH 107.9 billion of net profit, while only 17.4% of enterprises ended the year with losses of UAH 26.8 billion. This is the best indicator among all types of economic activity, where on average there were 71.0% of profit-making and 29.0% of loss-making enterprises,” Director of the IAE Yuriy Lupenko said.
The IAE recalled that the net profit of agricultural enterprises in 2019 amounted to UAH 91.3 billion, and the share of profit-making enterprises – 83.0%, while in the whole economy it was UAH 671.9 billion and 74.0%, respectively.
“So, at the end of 2020, the profits of agricultural enterprises decreased by almost UAH 10 billion, while maintaining a high share of profit-making enterprises,” Lupenko said.
In addition to agriculture, the largest net profit to the Ukrainian economy in 2020 was brought by enterprises of the financial sector and insurance activities (UAH 25.3 billion); repair of vehicles (UAH 22.2 billion); healthcare and social assistance (UAH 18.9 billion); transport, warehousing, postal and courier activities (UAH 18.0 billion); information and telecommunications (UAH 14.3 billion).
According to the IAE, the most significant losses were incurred in the past year by industrial enterprises (UAH 39.8 billion of loss) and the real estate industry (UAH 35.2 billion). The share of profitable enterprises in the agro-industrial complex significantly exceeds this value for other sectors of the economy. In particular, the share of profitable enterprises in the field of healthcare and social assistance amounted to 75.6% of their total number, repair of motor vehicles and motorcycles – 74.1%, transport, warehousing, postal and courier activities – 71.3%. At the same time, the smallest number of profit-making enterprises in 2020 was in the field of art, sports, entertainment and recreation (53.4%), as well as temporary accommodation and catering (58.8%).
The net profit of state-owned Ukrgasbank (Kyiv) in January-July 2021 amounted to UAH 1.135 billion, which is twice as much as in the same period in 2020 (UAH 554 million), the bank’s press service said.
According to the report, in July the bank’s profit amounted to UAH 408 million, which is 3.4 times more than in July last year (UAH 120 million).
Ukrgasbank was established in 1993. The state, represented by the Ministry of Finance, owns 94.9409% of the shares of the financial institution.
According to the National Bank of Ukraine, as of June 1, 2021, in terms of total assets (UAH 133.5 billion) Ukrgasbank ranked fourth among 73 banks operating in the country.
