Ovostar Union, one of the leading producers of eggs in Ukraine, saw its net profit fall by 73.7% in January-March 2020 compared to the same period in 2019, to $1.17 million.
According to the company’s report on the Warsaw Stock Exchange’s website, its revenue decreased by 24.7%, to $23.44 million in Q1, 2020.
Gross profit of Ovostar in January-March 2020 decreased by 54.6%, to $3.6 million, operating profit – by 78.7%, to $1.04 million.
The company earned $10.84 million from export sales ($5.56 million from sales of eggs and $5.28 million from sales of egg products). In Ukraine it sold eggs worth $8.54 million and egg products worth $4.06 million.
In Q 1, 2020, Ovostar Union invested $411,000 in the purchase of equipment for poultry houses and $450,000 in the overhauls and modernization of its facilities.
As reported, the company reduced egg sales by 28% in January-March 2020 compared to the same period in 2019, to 241 million eggs. Egg sales for export decreased by 56.5%, to 81 million eggs, resulting in a share of export sales of 34% during the specified period (compared to 56% in Q1, 2019).
Gallusman, one of Ovostar Union companies, plans to begin the construction of an egg production complex in Latvia in partnership with the energy company ADVEN in 2021, the project is currently at the stage of assessing potential environmental impacts. According to Ovostar, it is expected that the new production complex will export up to 90% of its products. Another Latvian subsidiary of Ovostar, Ovostar Europe, which since 2015 has been cooperating with the group’s trading partners in the EU countries, will be engaged in export sales. The goal of Ovostar is to enter new markets in Europe and the Middle East.
“Today, the project is at the stage of assessing the potential impact of the new production on the environment. The examination should be completed before the end of this year, and the start of construction work is scheduled for 2021,” the company noted.
It is projected to bring about EUR 100 million investment and 200 new jobs to the Latvian economy.
Ovostar reported that Gallusman and ADVEN had already signed a letter of intent. The partnership of the companies is aimed at finding the best energy and infrastructure solutions for the egg production complex to achieve non-waste production.
“Upon completion of the project, Gallusman will become a leader in the poultry industry and animal feed trade in Latvia, as well as the largest producer of eggs and egg products in Northern Europe,” Ovostar said.
Gallusman is part of the Ovostar Union group. Ovostar Union, one of the leading Ukrainian agricultural holdings, is one of the largest egg producers in Europe. The business model of the company is built on the principle of a full production cycle.
Ovostar Union, a leading egg and egg products manufacturer in Ukraine, supplied 466,000 eggs or 40 tonnes to Israel in April, which is 0.003% of its monthly production volume, the company’s press service has told Interfax-Ukraine.
“Israel is a country with high requirements for safety and quality of food, and we are proud that our products passed the control of the Israeli veterinary service, and we have the opportunity to supply eggs to this market. Israel is currently experiencing a shortage of this product, and, in addition to Ukraine, buys eggs in other European countries. On April 1, 2020, the Israeli Veterinary Service allowed producers of table eggs from Ukraine to export them to the country,” the company said.
Ovostar Union said that the company has been consistently implementing its export development strategy since 2015. Ovostar products are delivered to 55 countries, including to the markets of the EU, the Middle East, Southeast Asia and Africa. The export volume in 2019 amounted to an average of 43 million units per month, in 2018 – 48 million units per month.
Ovostar, citing the State Statistics Service, reported that the production of industrial eggs in Ukraine is growing annually, and in January-February 2020, egg production by specialized enterprises increased 8.6% compared to the same period in 2019.
“At the same time, the volume of the domestic market, taking into account the significant share of eggs collected by households, remains almost unchanged. The egg is one of the key export goods of the agricultural sector of Ukraine. With an average monthly production of 780 million pieces by poultry farms in general, 190 million eggs are exported, making our country one of the key players in the global egg industry,” the company said.
Speaking about the company’s work during the coronavirus disease (COVID-19) pandemic in Ukraine, Ovostar said that since the introduction of quarantine restrictions, the company, despite the additional costs of ensuring sanitary standards at enterprises, exchange rate fluctuations and rising cost of feed, has not changed selling prices for packaged products delivered to retail chains.
Ovostar Union, a leading egg producer in Ukraine, cut egg sales by 17% in 2019, to 1.147 billion eggs.
According to a company report on its website, egg production last year fell by 2.35, to 1.587 billion. The share of exported eggs of total sales grew by 4 percentage points in 2019, to 46%, and exports totaled 525 million eggs compared with 587 million in 2018.
“The decrease of shell eggs sales is accounted for by the significant reduction of trading operations in 2019. Average price of eggs in UAH terms fell by 12% y-o-y and reached UAH 1.606/egg, while in U.S. dollar terms the decrease was 7% y-o-y and the price for the year was $0.062/egg (2018: UAH 1.819/egg or $0.067/egg respectively),” the company said.
In 2019 the volume of eggs processed was 577 million, which by 9% exceeds the level of the previous year.
The volume of dry egg products output grew slightly y-o-y and reached 2,969 tonnes. The output of liquid egg products increased by 12% y-o-y up to 13,904 tonnes.
Ovostar Union agricultural group of companies, one of the leading producers of eggs in Ukraine, in January-September 2019 reduced egg sales by 15.9% compared to the same period in 2018, to 888 million pieces, due to a decrease in trading activity.
According to the group’s report on the Warsaw Stock Exchange, egg production during this period declined by 0.9%, to 1.191 billion pieces.
Egg exports for the nine months of this year were down by 0.7%, to 440 million eggs. The share of exports in the total volume of egg sales was 50% compared to 42% for the same period in 2018.
Ovostar Union, one of the leading egg and egg products producer in Ukraine, in January-March 2019 saw $4.5 million in net profit, which was 38.7% more than a year ago.
According to a company report on the Warsaw Stock Exchange (WSE), revenue fell by 8%, to $31.14 million. This is linked to the decrease in the egg and egg products prices.
Gross profit in January-March fell by 30%, to $7.82 million, and operating profit – by 47.4%, to $4.57 million.
Export sales over the period grew by 24.8%, reaching $18.02 million. The share of export grew from 43% to 58%.
Earnings before interest, taxes, depreciation and amortization (EBITDA) fell to $5.4 million ($9.5 million in January-March 2018).
“The first quarter of 2019 proved to be challenging for the egg industry due to the reduction of selling prices both on local and export markets. With regard to the unfavorable market situation, the management believes that the results achieved by the company in the reporting period are quite satisfying,” CEO Borys Bielikov said.