Avangard shell egg price increases 37% yoy in 1Q12

Avangard (AVGR LI), Ukraine’s largest egg producer, increased its shell egg selling price 37% yoy to UAH 0.74/egg in 1Q12, the company reported today in a trading update. Total egg production rose 11% yoy to 1.55 bln in 1Q12, with 1.20 bln sold to third parties (up 14% yoy), including 0.11 bln eggs exported. In its egg products segment, Avangard processed 0.27 bln eggs (flat yoy), with the average selling price for egg products decreasing 2% yoy to USD 7.6/kg.

Yegor Samusenko: Notably this is the first quarter during which Avangard’s selling prices are close to those posted by the third-party website ptichki.net (simple average over the period of UAH 0.78/egg is within the website’s range of UAH 0.55-0.95 during the period), after several years of reporting significant premiums for its shell egg selling prices to the market average. Should this not be attributed to the very good pricing environment during 1Q12 and become a consistent reporting practice for the company, we note this might eliminate a significant portion of the current negative attitude of investors to Avangard shares.