Astarta 1H17 revenue rises 69%, EBITDA slides 12% on no state support

Ukraine’s leading sugar producer and farmer Astarta
(AST PW) reported on Aug. 21 a 69% yoy jump in net revenue to EUR 250 mln in
1H17. The growth was fueled by sugar sales, which advanced 78% yoy to EUR 104
mln on both higher volumes (58% yoy) and prices (13% yoy). Out of the company’s
223 kt in sugar sales in 1H17, export volumes were 127 kt, or 6.4x higher yoy.
In its crop segment, the company’s revenue advanced 2.3x yoy to EUR 80 mln,
mostly due to higher volume sold.

The company’s EBITDA decreased 12% yoy to EUR 96 mln
in 1H17 owing to the absence of state support due to legislative changes (in
1H16, Astarta got EUR 20 mln in state support). Net of state support income,
the company’s EBITDA increased 8% yoy in 1H17. Its profit decreased 4% yoy to
EUR 73 mln.

Astarta’s net debt stood at EUR 99 mln as of end-1H17,
which is 32% less YTD and 31% less yoy. Its net debt-to- LTM EBITDA ratio
decreased to 0.71x as of end-1H17 from 0.96x as of end-2016 and 0.95x as of
end-1H16.

Alexander Paraschiy: Astarta was
not as lucky as MHP to have secured hefty state support, but otherwise its
P&L results are rather strong and its balance sheet is healthy. Provided
sugar and grain prices remain strong in Ukraine, we expect Astarta will
increase its EBITDA in 2H17, in yoy terms. Also, the effect of a high
comparison base of state grants will vanish in 2H17 (interestingly in 1H16, the
company reported higher income from state support than in full year 2016).