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Avangardco reports more weak financials in 1H19

Avangardco reports more weak financials in 1H19

30 August 2019

Ukraine’s leading egg producer Avangardco (AVGR LI, AVINPU)
boosted its revenue 25% yoy to USD 84.8 mln, according to its interim report.
The key driver of its revenue growth was its shell egg segment, where sales
increased 44% yoy to USD 72.2 mln. This result was achieved due to a 92% yoy
rise in shell egg sales (to 1.59 bln units) amid a 25% yoy decline in the
average egg price (to USD 0.046).

 

Meanwhile, the company’s operating losses widened 6.2x
yoy to USD 108.4 mln and net losses tripled yoy to USD 110.9 mln in 1H19. Its
cash outflow from operating activities was USD 6.0 mln (from inflow of USD 5.3
mln a year ago).

 

Avangardco’s net debt increased 6% year-to-date to USD
390.9 mln as of end-1H19. The company reported that it’s still in talks with
creditors on a potential restructuring deal.

 

Alexander Paraschiy: The company
remains in miserable position even though it was able to boost egg production
by 44% yoy in 1H19. What has attracted our attention this time is the higher
discount of its average reporting price to what was reported by local
competitor Ovostar (OVO PW).

 

For instance, in 1H18, Avargardco was selling its eggs
with a 12% discount to Ovostar, while in 1H19 the discount widened to 27%.
Regardless of whatever happens in the company, its only chance to survive is to
do a massive restructuring of its debt, which is swelling each year.

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