Business news from Ukraine

UKRAINE CUTS IMPORT OF MEDICINES FROM RUSSIA BUT BOOSTS PHARMACEUTICAL EXPORT TO RUSSIA

Ukraine in January-February 2018 considerably increased exports of medicines to Russia, cutting their imports from the country. According to the State Statistics Service, in January-February 2018, Ukraine exported medicines for $3.5 million to Russia, which is 18% more than a year ago. Imports of medicines from Russia to Ukraine over the period fell by 40.4%, to $2.85 million.
Last year Ukraine exported medicines to Russia for $27.89 million, which is 31.9% more than a year ago, and imported medicines for $29.79 million from Russia (15.9% down). In 2017, Ukraine exported medicines for $171.17 million, including to the CIS for $143.057 million.
As reported, at present, because of the sanctions imposed on Russia, Russia is discussing the ways of replacing imported medicines and reducing dependence on foreign pharmaceutical companies. The decline in the imports of Russian medicines to Ukraine began after the introduction of the requirement of compliance of drugs with GMP standards in Ukraine.

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FRENCH AGROGENERATION SEE 15-FOLD RISE IN NET LOSS IN UKRAINE

France’s AgroGeneration Group with assets in Ukraine saw EUR 13.18 million of net loss in 2017, which is almost 15 times more than a year ago. According to a company report on its website, revenue fell by 10.1%, to EUR 54.2 million, gross profit decreased 30.9%, to EUR 16.03 million, and operating profit – by 92.9%, to EUR 0.84 million. Earnings before interest, taxes, depreciation and amortization (EBITDA) totaled EUR 9.1 million in 2017, which is 52.4% less than in 2016. Net debt grew by 14%, to EUR 45.44 million.
The share of exports sales grew to 57% in 2017 from 45% in 2016.
In 2017, AgroGeneration produced 359,200 tonnes of grain and oilseed (vs. 387,200 in 2016) over a sown area of 105,400 ha (versus 109,000 ha in 2016). The decrease in area is driven by the sale of a farm in Kharkiv region in 2017. The decline in production is mainly driven by the drought during summer 2017 that significantly affected sunflower and corn crops, although the group generally performed well above its peers.
The group plans to sow 106,000 hectares, out of which 48,000 have already been sown with winter crops. Under favorable weather conditions, the group started the fertilization for its spring crops with a reduction (versus last year) in corn and peas in favor of winter crops.
The 2018 crop season was secured thanks to the renewal of its season’s financing with Alfa-Bank Ukraine for $35 million and a $10 million prepayment contract with Switzerland’s Quadra Commodities.
AgroGeneration is furthermore implementing a comprehensive plan of cost savings. This includes a reduction of production costs and decrease in general and administrative costs for a total estimated amount of roughly EUR 4.2 million. In this context and with this cost savings plan having its full effect in 2018, the group aims to return to its recent years’ EBITDA performance in 2018.
The French group AgroGeneration was founded in 2007. It grows grains and oilseeds. In Ukraine it currently processes about 120,000 hectares. In October 2013, AgroGeneration completed its merger with Ukrainian agricultural company Harmelia.

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UKRAINE SOWS SPRING GRAINS ON 86% OF PLANNED AREAS

Ukraine as of April 25 had sowed 2.1 million hectares (86% of the forecast) with early grain and leguminous crops.
According to a report on the website of the Ministry of Agrarian Policy and Food, 1.4 million hectares was sown with spring barley (86% of the plan), 157,000 hectares with oats (77%), 144,000 hectares with wheat (82%), and 386,000 ha with peas (91%).
In addition, corn was sown on one million hectares (22%), sugar beets on 239,000 hectares (79%), sunflower on 1.9 million hectares (34%), and soybeans on 172,000 hectares (9%).
Winter crops for grain were fertilized in 14 regions of Ukraine on an area of about 7.2 million hectares (99%).
As reported, with reference to the ministry, the area under early spring grains in 2018 will amount to 2.38 million hectares.

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FOZZY RETAIL DEVELOPER POSTS UAH 21.5 MLN NET LOSS

PrJSC Fozzy Retail (Vyshneve, Kyiv region), a construction and development company, in 2017 received UAH 21.5 million of net loss, while in 2016 it saw UAH 102.6 million of net profit. According to a company report in the information disclosure system of the National Securities and Stock Market Commission, its net income last year doubled to UAH 4.4 million, while undistributed profit halved to UAH 154.5 million.
The assets of Fozzy Retail decreased by 16.4% and amounted to UAH 857.3 million.
Long-term liabilities decreased by 25 times, to UAH 1.45 million, current liabilities increased by 7.7%, to UAH 699 million.
As reported, Fozzy Retail will pay UAH 141.6 million in dividends for 2017.
PrJSC Fozzy Retail was established in 2005. It carries out activities in the field of organizing construction of real estate for sale or leasing, as well as in accounting and consulting.