Ukrros announces 2008-09 targets, first audited IFRS statements

In a meeting with analysts on Tuesday, Ukrros’ (UROS: U/R) management announced plans to produce 150-160 ths mt of sugar this season (October-December), 9-14% less than last season. The company said it was targeting a grain and oilseed crop this yea of 143.5 ths mt, 26% below our projections. In addition, Ukrros management stated plans to grow the company’s land bank from 70 ths ha currently to 110 ths ha by the end of 2008 – in line with our estimates. The company said it is now in the process of finalizing the acquisition of an agricultural company with 30 ths ha of land. Ukrros’ management also disclosed the company’s first audited IFRS statements from March 20, its date of registration, to December 31, 2007. In the period, Ukrros’ revenues were USD 108.1 mln, EBITDA was negative USD 1.1 mln, and its net income was USD 39.5 mln. The negative EBITDA was due to higher sugar production costs for the period, which were 10% higher than sugar sales. Olha Pankiv: In our view, the expected decline in sugar production will lead to sales being ~20% below our previous projections for 2008-2009. We are currently reviewing our target price and recommendation for the stock.