Astarta grain output rises 35%, sugar output falls 24% in 2018

Ukraine’s leading sugar producer Astarta reported on
Jan. 17 its sugar output amounted to 352 kt in 2018. This is 24% less yoy and
the company’s weakest sugar production in the last five years. The company also
said it cut its use of energy per unit of sugar output by 5% yoy.

Ukraine’s sugar association reported on Jan. 12 that
the nation’s manufacturers produced 1.69 mmt of sugar since the start of the
2018/2019 production season (which lasts from September to early February) as
of Jan. 11, which is 16% less yoy.

Astarta’s harvest of grains and oilseeds reached 1,065
kt in 2018, which is 35% more yoy and an all-time high for the company. The
company also highlighted that its yield of corn was 9.8 t/ha, which is 53%
better yoy. Corn accounted for 58% of Astarta’s total grain and oilseed crop in
2018.

Its output of soybean products (meal, oil and husk)
was 209 kt in 2018, which is 2% more yoy and repeats its all-time high level of
2016. Its production of raw milk was 102 kt, or 7% less compared to the record-high
level of 2017.

Alexander Paraschiy: The bumper grain harvest will be supportive for Astarta’s P&L in
late 2018 and early 2019. But it won’t be able to offset the effect on P&L
from the weak performance of the company’s sugar segment, which is being
affected by weaker sugar prices in Ukraine. Ukraine’s declines in total sugar
production in the current season will be supportive for sugar prices in 2019,
so we see a good chance for some price recovery by mid-year. All this may
result in Astarta’s P&L remaining at current levels at minimum in 2019,
compared to 2018. We remain positive about Astarta’s mid-term value growth
prospects.