Astarta enjoys 7% qoq sugar price gain in 2Q20

Ukraine’s leading sugar producer and crop farmer
Astarta (AST PW) sold 74.0 kt of sugar in 2Q20 (a 26% yoy and 5% qoq drop),
according to its July 17 trading update. Its sugar price amounted to UAH
10.1/kg, which was a 3% advance yoy and 7% advance qoq. It sales of key crops
(wheat, corn and sunflower) were halved yoy to 100.5 kt in 2Q20, while its
average price of crops remained flat yoy. The company’s sale of soybean
products dropped by 22%-31% yoy (23%-26% qoq), though enjoying a 6%-7% yoy
increase in their prices in UAH terms. Its milk sale volumes declined 8% yoy to
22.5 kt (down 5% qoq), while its milk price increased 12% yoy to UAH 9.7/kg
(though falling 5% qoq).

Alexander Paraschiy: Based on
the company’s operating results, we estimate Astarta will report about EUR 171
mln of net revenue in 1H20 (down 25% yoy) and EBITDA of about EUR 50 mln (down
22% yoy). The falling sales volume of most goods was likely the result of
smaller stockpiles as of the beginning of the year, so the results are not
indicative for the company’s full-year performance. The rising prices of
Astarta’s key products is a positive trend which, if continues, will allow it
to boost its profitability in the second half of 2020. We remain positive on
Astarta’s ability to increase value in the mid-term.