Business news from Ukraine


The mobile communications operator lifecell in April-June 2019 saw a rise of 41.8% in net loss year-over-year, to UAH 293.2 million.
According to financial report posted on its official website, lifecell’s revenue grew by 16.1%, to UAH 1.48 billion.
Earnings before interest, taxes, depreciation and amortization (EBITDA) rose by 41.7%, to UAH 798.8 million. EBITDA margin grew by 9.7 percentage points, to 53.9%.
The increase is linked to growth in profit from consumption of mobile Internet that resulted of growing number of users of 4.5G network, the company said.
In the second quarter of 2018, the active subscriber base of the lifecell operator decreased by 12.8% on an annual basis, to 6.8 million subscribers.
Active three month ARPU (average revenue per user per month) increased by 27.3% by this period and amounted to UAH 53.1.
Capital investment in April-June totalled UAH 350 million that is 78.8% less year-over-year.
The penetration of smartphones in the operator’s network at the end of the second quarter was 73%.
Lifecell is the third largest mobile operator in Ukraine.



DFU Agro LLC (Hrozyne, Zhytomyr region, belongs to Danish Berry Farm) has claimed a possible loss of $100,000-300,000 if the company loses its harvest over the land conflict with Gorodok-Agro LLC (Malyn, Zhytomyr region), DFU Agro Director Vadym Shestakov said at a press conference at Interfax-Ukraine on Tuesday. According to him, the company since 2014 has been processing 1,200 hectares of land in Zhytomyr region on the basis of an agreement with the village councils on the management of the heritage. In November 2018, Gorodok-Agro rented several parcels of land, including 250 hectares, which remained in the use of DFU Agro (until 2018, this was impossible due to legislation). DFU Agro sowed this land with winter rape and rye before it was rented to Gorodok-Agro in August-September-2018. Now Gorodok-Agro claims to harvests from this area.

“We offered the company a similar area (250 hectares) of cultivated land, but they, using an ultimatum, suggested that we sell the rest of our land in these territories. In May 2019, we appealed to the anti-raider committee. In June, most of the committee members expressed the opinion that Gorodok-Agro has no right to harvest, but has the right to compensation,” the director of DFU Agro said.
He said that DFU Agro agrees with the compensation, but it has not yet been possible to agree on the terms of compensation.
“Our losses, if the opponent takes our harvest, will amount to $100,000-300,000. We are ready to harvest the crop and transfer it to a third party for safekeeping,” Shestakov said.
DFU Agro LLC is controlled by the Danish company Berry Farm, which is the owner of Dan-Farm Ukraine LLC (Khalcha, Kyiv region), one of the largest pig breeding enterprises in Ukraine. The charter capital of DFU Agro is UAH 63.7 million.

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The French group AgroGeneration with assets in Ukraine in 2018 received EUR8.52 million of net loss, which is 35.3% less than in 2017.
According to the report on the company’s website, its revenue decreased by 24.3%, to EUR41 million, gross profit by 29.7%, to EUR11.27 million. Operating profit for the year increased by 1.8 times, to EUR1.48 million.
EBITDA in 2018 rose by 11.8%, to EUR10.17 million. Net debt rose by 36.8% by the end of the year, to EUR62.16 million.
The share of export sales last year fell to 52% from 57% in 2017.
In 2018, AgroGeneration produced about 328,100 tonnes of grains and oilseeds from 105,200 hectares, which is 8.7% less than in 2017.
“The decline is due to the difficult weather conditions that affected early crops (especially wheat and barley). Despite this, the yield of AgroGeneration remains higher than the average figure in the Ukrainian agricultural sector,” the report says.



PrJSC Kyivkhlib, the largest capital producer of bread and bakery products, received a net loss of UAH 2.76 million in 2018 against a net profit of UAH 15.27 million a year earlier.
According to the company’s announcement of a general meeting of shareholders scheduled for April 22, its assets decreased by 11% last year, to UAH 688.22 million.
The total debtor indebtedness over the year declined by 25.5%, to UAH 303.43 million.
By the end of the year, the retained earnings of Kyivkhlib amounted to UAH 87.31 million.
PrJSC Kyivkhlib was established in 1996 by transforming state-owned enterprise Kyivkhlibprom. It consists of nine production sites in the capital and Kyiv region.



The mobile communications operator lifecell in 2018 saw UAH 1.301 billion in net loss, which is 2.58 times more than in 2017 (the loss of UAH 503.6 million), according to financial statements of its parent company Turkcell (Turkey) posted on its official website.
Revenue of the operator grew by 8.06%, to UAH 5.269 billion.
Earnings before interest, taxes, depreciation and amortization (EBITDA) rose by 8.2%, to UAH 2.762 billion, and EBITDA margin increased 25.2 percentage points, to 52.4%.
Capital investment of the operator in 2018 tripled, to UAH 4.032 billion, while in 2017 the operator invested UAH 1.33 billion.
The active subscribers’ base last year narrowed by 8.8%, to 7.3 million clients, and total number of subscribers in the network of the operator decreased 10.8%, to 9.9 million. Average revenue per user (ARPU) grew by 26.6%, to UAH 42.80, and ARPU of the active clients’ base rose by 20.1%, to UAH 57.30.
The number of minutes used by subscribers for voice data transfer grew by 12% in 2018, to 144.9 minutes.
Saturation of smartphones in the lifecell network as of late Q4 2018 reached 75.9%.
In the fourth quarter of 2018, the net loss of lifecell increased 4.07 times and amounted to UAH 730.1 million, while revenue grew by 11.6% to UAH 1.417 billion.
EBITDA increased by 3.37 times, to UAH 1.084 billion, while EBITDA margin rose by 50.4 percentage points, to 76.5%.
Capital investments in the last quarter of 2018 amounted to UAH 933.3 million, which is 2.25 times more than in the same period of 2017.
The Turkish company said that EBITDA growth was thanks to effective cost control measures, as well as the positive impact of the new IFRS standards.
At the same time, the company continues saying that the outflow of the subscriber base is mainly due to the general trend of reducing the use of SIM-cards in the country.
In addition, the operator reported on the increase in the number of active 4.5G Internet users (lifecell) for three months to 33% of the total number of mobile data users, and also that lifecell was the first in the Ukrainian market to deploy the NB-IoT network for smart devices.
As reported, in 2018, lifecell saw net loss of UAH 503.6 million compared to UAH 928.3 million of net profit in 2016, while the operator’s EBITDA in 2017 decreased by 2.2%, to UAH 1.326 billion.
Lifecell is the third largest mobile operator in Ukraine.

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ASKA insurance company (Kyiv) has paid UAH 1.635 million to an agricultural enterprise for the loss of apple harvest, the insurer has said in a press release.
According to the report, in July 2018, it rained with thunderstorms and hail in the territory of the insured gardens, a significant part of the apple harvest was damaged and lost.
“After the hail, a significant part of the apple harvest, which should be sold fresh, could only be handed over for processing. Another part of the fruit was completely destroyed. Deltafruit suffered significant losses,” Anton Ruban, the owner of the agricultural firm, said.
Three of the five insured sites were also affected. In the first two, due to hail, harvest quality deteriorated by 83-85%, and losses in both the quality and quantity were obtained in the third site.
“ASKA compensated for the loss of quality at the rate of UAH 5.6 per each kilogram of apples. The compensation cost for the lost amount is UAH 3.6 and UAH 9 per kilogram, respectively. These estimates are specified in the insurance contract and depend on the apple variety. On January 18, the client received 70% of the payment, the rest of the money was transferred in stages. We completed the settlement early February,” Corporate Insurance Director for ASKA Olena Shustur said.
ASKA said that this is the first case of such a large-scale payment in Ukraine related to damage to the harvest of fruit trees. The damage was caused by hail, secondary diseases due to hail, and most importantly, damage from the loss of commercial quality of fruits, which accounted for most of the damage, was also covered.

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