Business news from Ukraine

LVIV LOCOMOTIVE REPAIR PLANT POSTS UAH 10 MLN NET PROFIT IN Q3, 2015

KYIV. Nov 4 (Interfax-Ukraine) – Lviv Locomotive Repair Plant, one of the leading enterprises of Ukrzaliznytsia, in January-September 2015 posted a net profit of UAH 1.8 million against UAH 80,000 for the same period in 2014.

According to a company financial report in the information disclosure system of the National Commission on Securities and the Stock Market, the plant’s net income for the period totaled UAH 174 million, which is 4% up.

The plant in January-September saw a gross profit of UAH 34.5 million, which is 13.5% more than in the same period last year. Operating profit was UAH 5.8 million, which is 53% more as well.

Taking into account the previously announced performance of the plant in January-June, in July-September it posted a net profit of UAH 10.2 million against a net loss of UAH 1.7 million for the third quarter 2014, and the plant doubled its net income to UAH 107 3 million.

Lviv Locomotive Repair Plant repairs electric locomotives, auxiliary electric cars, wheel sets and manufactures spares for rail transport repairs.

PASSENGER CAR MARKET IN UKRAINE NEARS STABILIZATION IN OCT

KYIV. Nov 4 (Interfax-Ukraine) – Sales of new passenger cars in Ukraine in October grew by 28% compared to September 2015, to 5,291, which is only 9% down on October 2015, AUTO-Consulting has reported.

“In September, the first positive signals from the car market were seen [growth by 16.2% on August, to 4,137 cars], and the car market is approaching the point of stable growth each month. The beginning of the year the market started with bad indicators – 70-80% in decline,” the consultancy said.

AUTO-Consulting said that most brands recorded two-digit growth in sales in September, and the brands that saw their growth decline reported that this was unconnected with sales.

“For example, the fall in Toyota’s results [8% on September] is linked to the completion of supplies of Prius cars for the police, but market sales of the brand have grown,” reads the report.

Renault was the market leader in October with a market share of 10.7% and 564 cars sold (45% more than in September).

Toyota was second with 453 cars sold. Ford came third with a 7.5% market share and 398 cars sold (60.5% more), and ZAZ came fourth with 359 cars sold.

Skoda came fifth with 275 cars sold, BMW market sales grew by 57%, to 259 cars, and Suzuki – by 56%, to 137 cars.

The premium segment recorded a 3% rise compared to October 2014.

CROP PROTECTION AGENT MARKET IN UKRAINE COULD GROW BY 4-5% IN 2015 – BASF

KYIV. Nov 4 (Interfax-Ukraine) – Germany’s BASF chemical concern expects that the Ukrainian crop protection agent market will expand by 4-5% in 2015 after a decline of 15% in 2014, to EUR 600 million, BASF Agribusiness Manager in Ukraine, Moldova and the Caucasian countries Tiberiu Dima told reporters at the presentation of the farmer training program “The Growth Point” in Kyiv on Tuesday.

He said that the company’s share of the Ukrainian crop protection market was 15-20% in 2014, which is expected to grow in 2015, however the company’s market share will not change.

BASF, jointly with the International Finance Corporation (IFC), will launch “The Growth Point” training program for farmers. The project will be implemented in the 2016 season and around 240 farmers-representatives of large and medium farms with a total land bank of around 4,000 ha will participate.

The program organizers said that it will include financial management, marketing, business planning, risk management, and training on the effective use of innovative solutions and practical aspects of agribusiness financing.

“The goal of cooperation between BASF and IFC is to provide an opportunity to farmers to understand the financial aspect of business, assess various risks, and thus make more thoughtful strategic decisions for successful development,” Head of the marketing and financial service group at BASF in Ukraine Artem Rosliakov said at the presentation.

UKRAINIAN METALWORK PRODUCERS TO OCCUPY NICHE, BE IN DEMAND ON EU MARKET, FIRSTLY POLAND – EXPERT

KYIV. Nov 4 (Interfax-Ukraine) – The development of exports will take a long time but Ukrainian metalwork producers will soon occupy a niche and will be in demand on the European market, first of all in Poland, and they will also be able to successfully realize projects in developing regions in the post-Soviet space, Director General of Ukrstalkonstruktsiya and Board Chairman of the Ukrainian Steelwork Construction Center Volodymyr Nosov has said.

He said that the price of Ukrainian rolled metal is currently close to European prices, and taking into account the specifics of production processes at Ukrainian enterprises, Ukrainian metalwork products do not have an absolute price advantage in Europe.

“It is very important that Ukrainian metal roll suppliers feel interested in growth in the production of produce with higher added value, and increase domestic metal roll consumption. Today we sees this interest, and we hope that with the joint efforts of the steelwork construction sector participants, Ukrainian metalwork [products] will become more competitive in the West,” he said in an interview with the Ukrainian Steelwork Construction Center, which has been posted on its website.

Nosov said that most Ukrainian metalwork producers are less efficient than their European counterparts. Ukraine has small production volumes and it is inappropriate to invest in the optimization of organization of production processes.

“In other words, Ukrainian producers have the potential to reduce the production cost of metalwork [products],” he said, adding that it is strategically important for Ukrainian metalwork producers to develop exports, even if they make losses during the initial stages.

AREA OF RENTED OFFICES IN KYIV 14% UP, NEW SUPPLY REACHES 55,000 SQ M IN JAN-SEPT – COLLIERS INTERNATIONAL

KYIV. Nov 4 (Interfax-Ukraine) – The total area of rented office space in Kyiv in January-September 2015 increased by 14% compared to the same period in 2014, to about 70,000 square meters, while in July-September 2015 tenant demand remained buoyant.

This is according to a report issued by Colliers International consulting company.

“A major part of transactions in the office segment are those on revising and extending the existing lease agreements. Recently however, the number of requests to move to new offices has grown significantly, which, according to our forecasts, could transform into a quality indicators and positively impact the amount of office absorption in the next six months,” Managing Director of Colliers International in Ukraine Oleksandr Nosachenko said.

According to the report, in January-September 2015 the demand for offices in Kyiv was formed mainly by IT sector companies (40%), which have occupied the largest share among tenants in the total demand for such premises for a long time.

According to Colliers International, in July-September 2015 two new B class office centers entered the Kyiv office space market: at 56 Chervonozoriany Avenue (with a gross lettable area of 8,700 square meters) and at 3 Novovokzalna Street (5,500 square meters).

According to the company, the new supply of office space in Kyiv in January-September 2015 totaled about 55,000 square meters, while general availability totaled 1.745 million square meters.

UKRAINE HARVESTS 54.3 MLN TONNES OF GRAIN, 10.4 MLN TONNES OF SUNFLOWER BY OCT 30

KYIV. Nov 3 (Interfax-Ukraine) – Ukraine threshed grain and leguminous crops on 13.7 million hectares (93% of the projected area) and collected 54.3 million tonnes of grain by October 30.

According to the press service of the Agricultural Policy and Food Ministry, the maize yield by this date was 16.5 million tonnes.

The average yield of grain crops in the country currently stands at 39.7 centners per ha against 41 centners per ha in 2014.

In addition, agrarians harvested 10.4 million tonnes of sunflower from 4.9 million hectares (98% of the forecast) and 3.4 million tonnes of soybeans from 2 million hectares (92%).

Sugar beets had been harvested from 172,000 ha (72% of the forecast) by October 30 with a yield of 6.9 million tonnes.

As reported, the ministry expects that the grain harvest in Ukraine in 2015 will reach 59.2 million tonnes, while the USDA estimates it at 61.775 million tonnes.