Astarta sugar sales rise 9%, key crop sales fall 11% in 2020

Sugar sales at Ukraine’s leading sugar producer and crop
farmer Astarta (AST PW) swelled 33% yoy to 81.2 kt in 4Q20, according to its
Jan. 27 trading update. Its sales of three key crops (wheat, corn and
sunflower) amounted to 332.9 kt (2% less yoy) in 4Q20. Sales of soybean oil and
meal dropped 20% and 12% yoy, respectively. Its milk sales climbed 2% yoy to
22.3 kt. The average price of sugar surged 37% yoy to UAH 13.2/kg, the average
prices of key crops advanced 13% yoy, while the average price of soybean
products jumped 50% yoy in 4Q20.

Based on the company’s results, Astarta sold 328.5 kt
of sugar (up 9% yoy) at a 9% yoy higher price in 2020, according to Concorde
Capital calculations. Its sales of key crops fell 11% yoy to 978 kt, while
their average prices advanced 10% yoy in 2020. Its sale of soybean products
slid 15% yoy, while average prices advanced 15% yoy. Its sales of milk
decreased 4% yoy to 90.5 kt, while the average milk price improved 9% yoy in
2020.

Alexander Paraschiy: The
company’s operating results imply Astarta generated about EUR 415 mln of net
revenue in 2020, or 7% less yoy. An advance in key product prices in 4Q20
should have resulted in improved profitability of the company’s operation, so
its annual EBITDA is likely to have surged to about EUR 100 mln (vs. EUR 78 mln
a year before), according to our estimates. That said, the year 2020 should
have been very positive for the company, despite a decline in its harvest. All
in all, we remain positive about Astarta’s mid-term value potential.