Dakor Reports 1H07 Financials.

Dakor (DAKOR: BUY) posted net revenues of USD 29.7 mln, EBITDA margin of 13% and net margin of 4% (interim financials for 1H06 are not available for comparison). Olha Pankiv: Dakor’s margins improved compared to 1Q07, though are lower than those posted in 2006, as the company has been selling sugar in 1H07 at average price 12% lower compared to that average in 2006. Dakor is likely to meet our expectations in terms of sugar sales in 2007, as in 1H07 the company sold 48 ths mt of sugar – 55% of our projections of the entire 2007. The average sale price is USD 495 per mt is 9% lower compared to what we expected for 2007. We do not expect the traditional price decline in autumn, when new season’s sugar is hits the market due to this year’s poor harvest. The country is likely to face slight sugar deficit. To some extent lower sugar prices will be compensated in Dakor’s revenues in 2H07 with surging prices for wheat. We also project Dakor’s profitability to increase by the end of 3Q07 – in 4Q07, as according to the management, increased efficiency in beets growing is likely to be significant – 38 mt per ha, compared to 29 last year.

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                    Astarta*        Dakor                    

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                           1Q07   2Q07   1Q07  2Q07

Sales, USD mln     20.75  20.66   18.5  11.2

Gross margin          0.23   6.79   0.14  0.16

EBITDA margin       0.12   0.62   0.11  0.17

Net margin             0.11   0.32   0.03  0.06

* Astarta revalued  its crops at fields, which raised its profitability starting from EBITDA