Industrial Milk Company raises EBITDA, profit 1.4x yoy in 1H12

Industrial Milk Company (IMC PW), a Ukrainian farming company, reported 2.9x growth in revenue in 1H12 to USD 32.1 mln. Key items sold in 1H12 were corn (54% of revenue) and soybeans (17%). Normalized EBITDA grew 42% yoy to USD 29.3 mln, and net income advanced 44% yoy to USD 25.4 mln. All the reported profit numbers account for IAS 41 gains.

Alexander Paraschiy: The company’s financials for the full year will depend much on the harvest of corn, its key crop, accounting for more than half of FY11 and 1H12 sales. Interim financials for the agro company shed little light on the real stance of its business and the outlook for the full year, while we have to admit that Industrial Milk is one of the few Ukrainian farmers that suffered least from the adverse weather this year. So far, we maintain our outlook for the company’s financials and our bullish view on the stock. BUY.