Business news from Ukraine

SPF SELECTS APPRAISERS FOR FOUR REGIONAL POWER SUPPLY COMPANIES

KYIV. March 1 (Interfax-Ukraine) – The State Property Fund of Ukraine (SPF) at a tender has selected companies that will appraise the controlling stakes in four power supply companies and signed contracts with them.

The fund said that Ukrconsult expert agency LLC (Odesa) will appraise 70% of shares in public joint-stock company Mykolaivoblenergo, Northeast Consulting Group LLC (Kharkiv) will appraise 65.001% of shares in public joint-stock company Kharkivoblenergo, the United Enterprise for Appraisal of Special-Purpose Facilities and Investment – Ukraine LLC (Kyiv) will appraise 70.009% of shares in public joint-stock company Khmelnytskoblenergo and Orientyr-Reforma LLC (Ternopil) will appraise 50.999% of shares in public joint-stock company Ternopiloblenergo.

Deputy SPF Head Natalia Lebed said that thanks to the transparent tender and selection of worthy candidates the shares of regional power supply companies will be appraised at the highest professional level using best international practices and experience.

“Local companies won the tender. They have a large number of appraisers and more than 10-year experience of work, including in appraising assets in the energy sector,” she said.

The SPF has started preparing for the holding of tenders to sell 70% of shares in public joint-stock company Mykolaivoblenergo, 70% of shares in public joint-stock company Khmelnytskoblenergo, 65% of shares in public joint-stock company Kharkivoblenergo, 50.999% of shares in public joint-stock company Ternopiloblenergo and 50% plus one share in public joint-stock company Ukrnaftoproduct.

The tenders to sell the shares of the companies will be held in the form of open auctions.

 

MTG SELLS VIASAT UKRAINE TO 1+1 MEDIA GROUP

KYIV. March 1 (Interfax-Ukraine) – Modern Times Group MTG AB (MTG) has signed an agreement to sell its Ukrainian pay-TV business Viasat Ukraine to Ukraine’s 1+1 Media Group (media.1plus1.ua), MTG said in a press release on March 1.

Completion of the transaction is subject to local market regulatory approval.

“The sale of our Ukrainian operations is part of our ongoing strategic portfolio review. The Ukrainian team have created popular TV entertainment platforms and products, and we wish them every success in the future,” MTG President and CEO Jorgen Madsen Lindemann said.

Viasat Ukraine offers licensed packages of up to 110 TV channels on its satellite pay-TV platform, and also provides Ukraine’s largest telecoms operator Kyivstar with the Internet pay-TV platform for its recently launched offering of up to 130 TV channels and video on demand services.

 

UKRAINE HOPES TO PROVE U.S. IT EFFECTIVELY PROTECTS INTELLECTUAL PROPERTY RIGHTS

KYIV. March 1 (Interfax-Ukraine) – Ukraine hopes it will be able to prove at open hearings at the Office of the United States Trade Representative (USTR) that it effectively protects intellectual property rights (IPR), despite recommendations by business representatives that Ukraine should be again designated as a Priority Foreign Country, which is the worst classification given to “foreign countries that deny “adequate and effective” protection of intellectual property rights.

The hearings will begin on March 1, the Ukrainian Economic Development and Trade Ministry said.

A Ukrainian delegation at the hearings will be represented by Deputy Economic Development and Trade Minister and Ukrainian trade envoy Nataliya Mykolska and Director of the ministry’s department for the development of innovation and intellectual property Olena Mynych.

“It is important to Ukraine, as the situation in IPR protection has a direct influence on any decision as for an access to our state to the U.S. market, including as part of the U.S. Generalized System of Preferences [provides duty-free treatment to goods of designated beneficiary countries and territories],” Mykolska said.

The Ukrainian delegates will inform the U.S. side about Ukraine’s progress in protecting of intellectual property rights in such directions as the fight against piracy in copyright and related rights; legalization of software at government agencies; the elimination of problems in collective management of property rights; strengthening of IPR protection; reform of state agencies that manage intellectual property.

According to Mykolska, Ukraine’s status in the Special 301 Report in 2015 was improved, which was a certain gesture of confidence in Ukraine, so the country will continue to take measures to be completely excluded from the list of the countries that deny effective protection of intellectual property rights.

As was reported. Ukraine is on the Priority Watch List in 2015. Ukraine was designated a Priority Foreign Country (PFC) in the 2013 Special 301 Report.

As described in that report, the three grounds for Ukraine’s PFC designation were: (1) the unfair, nontransparent administration of the system for collecting societies, which are responsible for collecting and distributing royalties to U.S. and other rights holders; (2) widespread (and admitted) use of illegal software by the Ukrainian government agencies; and (3) failure to implement an effective means to combat the widespread online infringement of copyright and related rights in Ukraine, including the lack of transparent and predictable provisions on intermediary liability and liability for third parties that facilitate piracy, limitations on such liability for Internet Service Providers and enforcement of takedown notices for infringing online content. Following Ukraine’s designation and pursuant to statute, the Office of the U.S. Trade Representative conducted an investigation under Section 301 of Ukraine’s IPR acts, policies, and practices, which concluded in March 2014. The U.S. Trade Representative determined that while IPR problems persisted, no adverse actions would be taken against Ukraine because of the political situation in Ukraine at that time.

UKRAINE RECEIVES PERMITS TO SUPPLY POULTRY, BEEF, LAMB TO UAE, TALKS ON SUPPLIES OF DAIRY PRODUCTS, EGGS, FISH UNDERWAY

KYIV. March 1 (Interfax-Ukraine) – The United Arab Emirates (UAE) has permitted supply of Ukrainian lamb meat, poultry and beef, and the veterinary services of the two countries are being agreed the draft veterinary certificates for exports of milk and dairy products, fish and fish products.

According to a posting on the website of the State Veterinary and Biosecurity Service of Ukraine, on February 25, 2016 deputy head of the State Veterinary and Biosecurity Service of Ukraine Oleksandr Verzhykhovsky met a delegate from the World Organisation for Animal Health (OIE) from the UAE Abdel Rahim Al-Hamdi held at the UAE Ministry of Environment and Water.

Al-Hamdi said at the meeting that a ban on exports of beef from Ukraine has been lifted and the access of Ukrainian companies that have the right to export poultry to the EU to the UAE market has been approved.

The sides signed veterinary certificates for exports of beef and lamb meat from Ukraine to the UAE, which is confirmation of Ukraine’s right to supply these products to the UAE market.

The parties agreed to quickly draw up the veterinary certificate for exports of honey from Ukraine and health certificates for exports of confectionary, canned fruit and vegetables and other food.

The Ukrainian veterinary service reported that the interested companies are to apply to the UAE Ministry of Environment and Water to receive the right to export poultry, beef and lamb meat. After the inspection the companies will be included in the list of companies that can exports these products to the UAE.

INFLATION IN UKRAINE, 2015

Source: State Statistics Services

Source: State Statistics Services

KERNEL SEES 2.7 TIMES RISE IN NET PROFIT IN Q2 FY2016

KYIV. Feb 26 (Interfax-Ukraine) – Kernel, one of the largest Ukrainian agrarian groups, saw a rise of 2.7 times in net profit in Q2 of FY2016 started in July 2015, to $117.75 million, the company said in a report on Friday.

The company said that its revenue over the period fell by 5%, to $620.97 million, gross profit dropped by 3.2%, to $166.3 million and operating profit rose by 5%, to $129.9 million, reflecting year-over-year lower grain prices and mixed dynamics in sales volumes across segments

Kernel’s earnings before interest, tax, depreciation and amortization (EBITDA) reached $145.1 million, which is 2% up year-over-year.

Revenue from sunflower oil sold in bulk rose by 11%, to $316 million, from bottled sunflower oil fell by 12%, to $34 million, grain – by 17%, to $258.5 million, it grew by 12% from export terminal services, to $12.4 million and fell by 9% from silo services, to $22.7 million.

Net debt decreased to $465.8 million as of December 31 2015 versus $735.2 million as of December 31, 2014, as the company utilized its strong operating cash flow to improve its balance sheet.

In H1 FY2016 Kernel saw a rise of 2.1 times in net profit, to $141.8 million, revenue fell by 19%, to $998.69 million, gross profit – by 15%, to $239.79 million and operating profit – by 8%, to $169.454 million.

EBITDA in H1 FY2016 totaled $200.2 million, which is 10% down year-over-year.

Kernel is a vertically integrated company which has been operating in the Ukrainian agribusiness sector since 1994. The group produces sugar and sunflower oil, distributes bottled oil under the brand names Schedry Dar, Stozhar and Chumak Zolota, exports oil and grain, and provides elevator storage services for grain and oilseeds.