Astarta 2011 EBITDA 10% below our expectations

Astarta (AST PW) reported preliminary unaudited financial results for 2011 on Friday: revenues grew 46% yoy to UAH 3,400 mln, gross profit rose 45% yoy to UAH 1,400 mln, and EBITDA increased 19% yoy to UAH 1,250 mln. In 2011, Astarta sold 250 kt of sugar, up 10% yoy, on production of 370 kt (+85% yoy, market share of 16% in Ukraine). Astarta increased its harvested landbank by 17% yoy to 245 ths ha, harvested 660 kt of grains and oilseeds (vs. 330 kt in 2010), and sold 400 kt, up 67% yoy. In its cattle farming segment, Astarta’s revenues grew 55% yoy, with milk volumes rising 29% yoy to 63 kt, with rest due to price growth.

Yegor Samusenko: While revenues were 10% above our estimate, EBITDA was 10% below, which is disappointing as Astarta was still selling sugar in 4Q11 at reasonably high prices (at an average of USD 680/t, according to our estimates). Lower-than-expected profitability in 2011 against strong sugar pricing suggests Astarta’s 2011 production costs were higher than we anticipated and implies our 2012 profit forecasts for Astrata may be somewhat optimistic.