Business news from Ukraine

REVENUE FROM SALES OF FARMLAND LEASE RIGHTS IN JAN-AUG EXCEEDS ENTIRE 2017 FIGURE

Revenue of local budgets from the sale of rights to lease farmland parcels in state ownership by territorial agencies of the State Service for Geodesy, Cartography and Cadastre totaled UAH 131 million in January-August 2018.
The Agricultural Policy and Food Ministry said in a press release that in 2017, revenue from the sale of rights to lease farmland parcels in state ownership totaled UAH 118.7 million, in 2016- UAH 95.8 million and in 2015 – UAH 38.4 million.
The ministry said that the good results of land auctions were recorded in Sumy region (5,143 ha for UAH 11.98 million), Odesa region (4,162 ha for UAH 17.8 million), Donetsk region (2,897 ha for UAH 4.49 million), Chernihiv region (3,954 ha for UAH 10.9 million) and Kherson region (2,888 ha for UAH 3.14 million).

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REVENUE OF UKRAINIAN BANKS IN JAN-JULY 2018 7% UP

Revenue of Ukrainian banks, not taking into account insolvent banks, in January-July 2018 totaled UAH 108.913 billion, which is 7.17% more than a year ago, according to a posting on the website of the National Bank of Ukraine (NBU).
The number of banks for the period from August 1, 2017 to August 1, 2018, was reduced to 82 from 89. At the same time, the assets of banks during this period increased by 4.05%, to UAH 1.315 trillion, and total assets (not adjusted to reserves for covering possible losses from active operations) grew by 7.77%, to UAH 1.876 trillion.
The National Bank said the interest income of banks over the period increased by 9.37%, to UAH 78.045 billion, while the loan portfolio from August 1, 2017 to August 1, 2018 increased by 10.92%, to UAH 1.078 trillion.
Commission income rose by 3307%, to UAH 28.303 billion, other operating revenues also increased by 56.72%, to UAH 4.661 billion, other income by 21.06%, to UAH 799 million.
Expenses of the banking system over the period amounted to UAH 99.144 billion, which is 2.65% less than for the same period in 2017.
Interest expenses decreased by 8.19%, to UAH 39.154 billion, while the total amount of deposited funds, including term deposits from other banks, grew by 8.18%, to UAH 953.163 billion.
Net profit after taxes of Ukrainian banks in January-July 2018 totaled UAH 9.769 billion, while a year ago the loss of UAH 223 million was recorded.

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VODAFONE UKRAINE SEES 2.1% RISE IN REVENUE IN Q1 2018, CUTS NET PROFIT BY 31%

Vodafone Ukraine, the mobile communications operator, saw UAH 2.9 billion of revenue in January-March 2018, which is 2.1% more than a year ago.
According to a financial report of the operator published on Wednesday, net profit in Q1 2018 fell by 30.75%, to UAH 367 million.
Operating income before depreciation and amortization (OIBDA) grew by 17.6% year-over-year, to UAH 1.5 billion.
OIBDA margin reached 52.8%, a rise by 7 percentage points (p.p.) year-over-year.
Net profit in Q1 2018 totaled UAH 367 million, which is UAH 163 million less than a year ago. The main reasons for the reduction of profit were the increase in amortization expenses and devaluation of long-term assets in eastern Ukraine.
Subscribers’ revenue in Q1 2018 grew mainly thanks to organic growth of revenue from data transfer. In the period, Vodafone Ukraine increased revenue from data transfer 1.5-fold.
The subscribers’ base reached 20.7 million clients in Q1 2018. The number of data users grew by 1.2 million in a year.
Early 2018 Vodafone Ukraine significantly increased investment in infrastructure – UAH 1.2 billion in Q1 2018, including the cost of 4G licenses, investment in development of 3G and 4G networks.
Today high-speed 4G Internet is provided in 25 cities of Ukraine. Over 1 million clients of Vodafone Ukraine used 4G mobile Internet. 3G coverage is available for over 80% of residents of Ukraine in over 10,000 cities and towns.
Vodafone Ukraine is the second largest mobile communications operator in the country which serviced 20.8 million subscribers as of late 2017.

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LEADING MOBILE OPERATOR KYIVSTAR SEES 10% RISE IN REVENUE IN Q1

The mobile communications operator Kyivstar saw a 10.1% rise in total revenue in January-March 2018 year-over-year, to UAH 4.263 billion, according to a financial report of the company’s shareholder – Veon international group (before the rebranding it was VimpelCom Ltd.) posted on its official website. According to the report, during this period, Kyivstar increased earnings before interest, taxes, depreciation and amortization (EBITDA) by 16.4% compared to the same period in 2016, to UAH 2.412 billion. The EBITDA margin increased 3 percentage points (p.p.), to 56.6%.
Revenue from mobile operator services for the first three months of 2018 amounted to UAH 3.968 billion, an 11% increase over the same period in 2017, which is explained by the growth in both the number of mobile Internet users (by 1.6 million) and their mobile data use (average consumption of mobile data traffic per month increased by 121%, to 1.5 GB per subscriber).
At the same time, revenue from mobile Internet for the year increased by almost 59%. Its share was 33% of total revenue from mobile communications. The number of mobile subscribers of Kyivstar in January-March 2018 increased 1.9% to 26.5 million. The minutes of use (MoU) grew by 2.1%, to 586 minutes. The average revenue per user (ARPU) rose by 8.5%, to UAH 49 per month.
Revenue of the mobile operator from fixed-line communications remained unchanged in the first quarter of 2018, being UAH 295 million. The number of fixed-line Internet users slightly grew – by 2.7%, to some 800,000 users, and ARPU from fixed-line Internet grew by 4.3%, to UAH 72.
Capital investment over the period fell by 6.8% (not taking into account the cost of 4G licenses), reaching UAH 687 million.
According to the report, the operator continued to deploy its 3G network in the first quarter, expanding its coverage of the area with the 3G network from 64% in the first quarter of 2017 to 74% in the first quarter of 2018. In April 2018, the company began to provide communication services in the 4G (LTE) standard. In the first quarter of 2018, Kyivstar transferred more than UAH 2.9 billion taxes and duties to the national budget of Ukraine.

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BULGARIAN EUROINS INSURANCE GROUP INCREASES REVENUE BY 19%, QUADRUPLES NET PROFIT IN 2017

Euroins Insurance Group (Bulgaria), which includes Euroins Ukraine (Kyiv), in 2017 increased revenue by 19%, for the first time exceeding BGN 1 billion (EUR 512 million), and quadrupled net profit to BGN 42 million (EUR21.5 million), according to a press release from Euroins Ukraine.
It is also noted that in general the income of Eurohold Bulgaria AD, which includes Euroins Insurance Group, in 2017 increased by 18% compared to the previous year and amounted to BGN 1.2 billion (about EUR615 million). Net profit increased by almost 2.4 times, to BGN 24.4 million (EUR12.5 million), while operating profit (EBITDA) by 65%, to BGN 57.6 million (EUR29 million).
The holding’s net worth as a whole increased to almost BGN 215 million (EUR110 million), while its assets grew by 17%, to BGN 1.33 billion (EUR681 million).
The press release says on April 17, 2018 Euroins Insurance Group purchased Ukraine’s European Travel Insurance (ERV) from the German company ERGO, owned by MunichRe concern.
PJSC Euroins Ukraine has been operating in the Ukrainian insurance market for 25 years. The regional network of Euroins Ukraine covers 26 cities of Ukraine. The weighty share in the company’s portfolio is occupied by KASKO, which is one of the priority activities. The strategy of Euroins Ukraine foresees occupying 5-10% of the Ukrainian insurance market.

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HEAVY TRUCK PRODUCER AVTOKRAZ HAS 15% FALL IN NET REVENUE

Private joint-stock company AvtoKrAZ (Kremenchuk, Poltava region), the sole Ukrainian manufacturer of heavy trucks, saw UAH 1.048 billion of net revenue in 2017 (UAH 1.232 billion in 2016).
According to a Tuesday press release of the company, AvtoKrAZ CEO Roman Cherniak presented the figure in his report at a general meeting of shareholders held on April 3.
According to the press release, the share of dropside trucks of total vehicles made by the company was 41%, the share of chassis for various special-purpose equipment was 38%, tractor trucks – 17%, dump trucks – 3% and short log trucks – 1%.
Some 81% of trucks were delivered to the Ukrainian market, and supplies to the civil sector of the domestic market tripled. 5% of trucks were exported to non-CIS countries and 14% to the CIS.
Cherniak said that AvtoKrAZ last year passed a first audit of the quality management system under the certificate received in November 2016 confirming compliance with ISO/TS 16949:2009.
Capital investment in 2017 totaled UAH 1.8 million. The funds were sent to buy equipment, tools, modernization and reconstruction of fixed assets. Some UAH 29 million was spent on minor repair and overhaul and some UAH 7.5 million on maintenance of a clinic, dormitories, catering rooms, the palace of culture and other facilities.
According to the report of the CFO, growth of expenses and not enough volumes of production, permanent growth of currency exchange rates, accrued interest for the use of loans contributed to the fact that AvtoKrAZ saw large losses in 2017.

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