Astarta revenue decreases 12%, EBITDA jumps 87% in 1H21

Ukraine’s leading sugar producer and farmer Astarta
(AST PW) decreased its net revenue 12% yoy to EUR 150.9 mln in 1H21, according
to its interim report published on Aug. 11. The decline was mostly caused by a
50% yoy decrease of revenue from the farming segment (to EUR 27.4 mln) as the
company halved sales volumes of key crops. Meanwhile, revenue in the sugar
segment increased 4% yoy to EUR 58.9 mln, as a 25% yoy decline in the volume of
sugar sold was offset by much better prices.

Astarta’s 1H21 EBITDA was EUR 124.8 mln, or 87% higher
yoy. The key contributor to the increase was the positive effect of the
revaluation of biological assets and agriculture produce, which added net EUR
82.5 mln to EBITDA (up 4.2x yoy). Adjusted for non-cash revaluations, Astarta’s
EBITDA was EUR 42.3 mln, or 9% less yoy.

The company’s bottom line was positive at EUR 89.5 mln
in 1H21, which is 12x more yoy.

Its operating cash flow before working capital changes
improved 2% yoy to EUR 34.1 mln, while net cash from operations was negative
EUR 8.7 mln (vs. positive EUR 46.4 mln a year ago). Its net cash outflow for
investment activities was EUR 1.7 mln (down 81% yoy) in 1H21.

The company’s end-June net debt was EUR 178.6 mln,
which is a 25% decline yoy but a 38% increase YTD. Its net debt to LTM EBITDA
ratio reached 1.04x as of end-June, compared to 3.18x a year ago and 1.14x as
of end-December.

Alexander Paraschiy: The company’s 1H21 revenue is slightly better than our estimate of EUR 149 mln, while adjusted EBITDA is below our estimate.
Taking into account the beneficial price situation on soft commodity markets,
as well as expected good harvest results, this year should improve the
company’s P&L. However, it looks like the company has already included most
of its 2H21 gains into the 1H21 financial results, meaning that its full-year unadjusted
EBITDA and bottom line won’t differ much from what the company has already
reported. Anyway, we remain positive about the company’s ability to increase
its value in the mid-term.