Astarta 9M17 revenue swells 61%, EBITDA falls 13%

Ukraine’s leading sugar producer and farmer Astarta (AST
PW) boosted its net revenue 61% yoy to EUR 348.7 mln in 9M17, according to its
interim report published on Nov. 7. The gains were across the board, including
its sugar segment (55% yoy growth to EUR 155.8 mln), crops (147% yoy surge to
EUR 105.7 mln) and milk (35% growth to EUR 22.8 mln).

The company’s EBITDA for the period was EUR 111.7 mln,
a 13% yoy decrease, or EUR 17.3 mln. The key factors to declining EBITDA were
an absence of government grants (which amounted to EUR 20.1 mln the year before)
and smaller gains from revaluation of agricultural produce (a EUR 5.6 mln yoy
drop). Smaller EBITDA resulted in a 6% yoy decrease of the company’s bottom
line to EUR 74.1 mln.

The company’s net debt amounted to EUR 110.3 mln as of
end-September, which is 29% less yoy and 24% less YTD. Its net debt-to-LTM
EBITDA ratio fell to 0.82x as of end-September from 0.96x as of the year start
and 1.03x a year before.

Alexander Paraschiy: While the
company’s 9M17 revenue appeared to be a bit better than we expected (EUR 340
mln), its EBITDA is weaker than our expectations. Based on this, we are
downgrading our outlook for the company’s 2017 EBITDA to EUR 130-140 mln (from EUR 140-150 mln before), which would
be about 11% less yoy. At the same time, we remain bullish on Astarta stock,
which trades at appealing forward EV/EBITDA multiple of 3.1x.