Astarta revenue falls 39% yoy, EBITDA 69% yoy in 1Q18

Ukraine’s leading sugar producer and grain farmer
Astarta (AST PW) reported a 39% yoy drop in net revenue to EUR 90.6 mln in
1Q18, according to its May 10 release. Revenue in its sugar segment fell 48%
yoy (to EUR 35.5 mln), in its crops segment dropped 47% yoy (to EUR 25.7 mln)
and in its soybean products slid 3% yoy (to EUR 20.7 mln).

Astarta’s EBITDA plunged 69% yoy to EUR 13.5 mln and its
bottom line plummeted 88% yoy to EUR 3.7 mln. Its cash generated from
operations fell 71% yoy to EUR 24.9 mln in 1Q18.

The company’s total debt stood at EUR 141.6 mln as of
end-1Q18, which is 3% less YTD, but 22% more yoy. Its net debt stood at EUR 126.6
mln and net debt-to-LTM EBITDA ratio surged to 1.41x as of end-1Q18, up from
0.48x in 1Q17 and 1.08x in 2017.

Alexander Paraschiy: Astarta’s weak P&L for the quarter is what we expected (we saw a deeper yoy decline in revenue). However,
we note that the weak yoy performance for the quarter is not indicative of
current trends as the deep plunge in revenue is mostly the result of the high
comparison base of 1Q17. For instance, in 1Q17 Astarta sold 141 kt of sugar, or
twice more than for any other first quarter before. Its 1Q18 sugar sales (93
kt) proved to be the second-best historical result for a first quarter.
Therefore, we expect improvement in Astarta’s yoy performance in the following
quarters, but remain firm on our position that this year’s P&L will be
weaker for the company.