Avangard reports EBITDA 7% above consensus in 2011

Avangard (AVGR LI) reported its 2011 financials today: revenues were up 26% yoy to USD 553.3 mln (2% below consensus), EBITDA increased by 27% yoy to USD 245.8 mln (7% above consensus), with a flat margin at 44%, and net income increased by 6% yoy to USD 196.3 mln (8% above consensus). Cash flow from operations improved to positive USD 204.9 mln in 2011, from negative of USD 135.4 mln in 2010. The company will hold a conference call today at 14:00 GMT. It is unclear whether results were audited as neither an auditor’s report nor notes to financials statements were published.

Yegor Samusenko: While the quality of earnings remains low in our view primarily because the company reports eggs selling prices well above those third party sources provide, we note tremendous improvement in the company’s cash flow statement. Because of the very moderate growth in working capital in 2011, Avangard improved its cash flow from operations to positive USD 185.7 mln in 2011 from negative USD 159.0 mln in 2010, with a margin of 34% in 2011 vs. negative 36% in 2010 on a flat 44% EBITDA margin in both years.