Astarta sugar sales fall 20%, key crop sales rise 2% yoy in 3Q18

Sugar sales at Ukraine’s leading sugar producer and grain
farmer Astarta (AST PW) fell 20% yoy to 88.0 kt in 3Q18, according to its
operating update published on Oct. 24. Its average sugar price decreased 18%
yoy to UAH 10,460 per ton.

Its total sale of key crops (wheat, corn, barley and
sunflower) increased 2% yoy to 156.4 kt in 3Q18, while their average price
increased 30% yoy in UAH terms. The company’s soybean oil sales halved yoy to
4.5 kt, while soybean meal sales rose 6% yoy to 29.2 kt. Its milk sales
decreased 6% yoy to 24.3 kt and the average price grew 11% yoy in UAH terms.

Its quarterly results imply that in 9M18, Astarta
sales slid 18% yoy to 272.6 kt for sugar, 31% yoy to 443.5 kt for its key
crops, 17% yoy to 26.3 kt for soybean oil, and 1% yoy to 107.2 kt and 78.6 kt
for soybean meal and milk, respectively.

Alexander Paraschiy: We estimate
that Astarta’s revenue will be reported at EUR 258 mln in 9M18 (down 26% yoy),
while its EBITDA will be about EUR 75 mln (down 33% yoy), based on the
published operating data. That should be some improvement compared to its 1H18
results, in which revenue fell 30% yoy and EBITDA decreased 38% yoy. There is
also potential for a positive surprise in terms of EBITDA, in case the
company’s harvest of late crops exceeds significantly its previous estimates.

In any case, this year will be significantly worse
for Astarta’s P&L, largely due to a smaller amount of crop sales and weaker
sugar prices. In the next year, we expect some improvement in revenue and
EBITDA due to the better performance of its crop segment.