Astarta sugar, soy prices increase 1.7x yoy in 1H21

Ukraine’s leading sugar producer and farmer Astarta
(AST PW) sold 114 kt of sugar in 1H21, which is a 25% yoy decline, according to
its July 16 trading update. The average sugar price for the period was UAH
16.7/kg, which is 66% more yoy. Its volumes of key crop sales (wheat, corn,
sunflower) halved yoy to 161 kt, while the average price increased 22% yoy.
Volumes of soybean oil and meal sales declined 22% yoy, while their average
price increased 68% yoy in 1H21. The company sold 46 kt of milk (up 4% yoy)
with the average price jumping 17% yoy.

In 2Q21, the average price of sugar that Astarta sold
increased 7% qoq, crop prices increased 10% qoq, soy product prices increased
55% qoq while milk prices decreased 1% qoq.

Alexander Paraschiy: Astarta
enjoyed another strong quarter in terms of pricing, so its margins should
further improve in 2Q21. Based on the presented results, we estimate Astarta’s
revenue would reach EUR 149 mln in 1H21 (down 12% yoy) and its EBITDA (net of
revaluation gains) would be about EUR 52 mln (up 12% yoy). While the results of
the first half of the calendar year are not very indicative for the farming
company’s full-year performance (as the company was selling goods from the
previous season’s harvest), we see the company has a good chance to further
improve its P&L in 2021. 

We remain optimistic about Astarta’s mid-term value
growth.