Astarta decreases sales of key goods, enjoys better prices in 2021

Ukraine’s leading sugar producer and farmer Astarta
(AST PW) reported on Jan. 25 that it increased sugar sales 6% yoy to 81.2 kt and
increased its selling price 35% yoy (in UAH terms) in 4Q21. Its sales of key
crops (corn, wheat and sunflower) increased 21% yoy to 332.9 kt and their
average price increased 24% yoy in 4Q21. Astarta’s sale of soybean oil
decreased 28% yoy to 8.5 kt amid a 40% yoy growth in its price. Its sales of
milk increased 9% yoy to 22.3 kt and its price increased 12% yoy in 4Q21.

Its quarterly results imply that in the year 2021,
Astarta decreased sugar sales by 12% yoy to 289.9 kt while its selling price grew
62% yoy in UAH terms. The company’s sales of key crops decreased 16% yoy to
817.8 kt and their average price increased 22% yoy in 2021. Its sale of soybean
oil and meal decreased 24% yoy and 13% yoy, while their prices grew 63% yoy and
40% yoy, respectively. Astarta’s sales of milk increased 4% yoy to 94.2 kt and
its price increased 16% yoy in 2021.

Alexander Paraschiy: Astarta’s
decrease of goods delivery in 2021 was a result of the low harvest in the
season of 2019-2020, which affected its goods stock as of the beginning of last
year. With much better production volumes of the 2020-2021 season, its sales in
the current calendar year will be better yoy. Meanwhile, we expect a
significant improvement of the company’s P&L in 2021, which should be a result
of much better achieved prices. We estimate Astarta’s 2021 revenue reached EUR
470-475 mln (up 13%-14% yoy) and EBITDA will be reported in the range of EUR
170-195 mln (up 50%-70% yoy). We remain bullish on AST stock.