Astarta sugar sales rise 58%, crops sales more than double in 1H17

Ukrainian farmer and top sugar producer Astarta (AST
PW) sold 81.2 kt of sugar in 2Q17, rising 8% yoy, according to its trading
update published on July 21. Its realized sugar price increased 18% yoy in UAH
terms. Its sales of wheat, corn, barley and sunflower surged 154% yoy to 196 kt
in 2Q17. Sales of soybean oil and soybean meal decreased 17% yoy and 13% yoy,
respectively.

In 1H17, Astarta’s sugar sales rose 58% yoy to 223 kt,
and sales of key crops surged 146% yoy to 490 kt. Sales of soybean oil increased
22% yoy to 21.8 kt.

Alexander Paraschiy: Based on
the above operational results, we estimate that Astarta’s total revenue rose
67% yoy to EUR 245 mln in 1H17, including revenue from sugar sales of EUR 104
mln, which rose 78% yoy. Sugar prices remain strong in Ukraine, allowing
Astarta to generate most of its profit from its sugar business, while we see
the risk of domestic prices decreasing in 2H17, as global trends suggest.
Nevertheless, the company’s strong operating results allow us to confirm our
positive view on Astarta stock, which trades currently at 3.0x EV / LTM EBITDA.