Ovostar increases revenue 37%, EBITDA 2.6x in 1Q21

Ukraine’s egg producer Ovostar Union (OVO PW) reported
a 37% yoy growth in net revenue to USD 32.17 mln, according to its May 14
filling. The company’s EBITDA surged 2.55x yoy to USD 5.42 mln, with the EBITDA
margin jumping 8pp to 16.8%. Ovostar’s bottom line increased 4.0x yoy to USD
4.73 mln in 1Q21.

The company’s operating cash flow before working
capital changes grew 2.5x yoy to USD 6.07 mln, while net cash flow from
operations increased 10% yoy to USD 4.43 mln. Ovostar’s CapEx declined 94% yoy
to USD 0.07 mln. Its net debt increased 41% yoy to USD 8.81 mln, while its cash
balance fell 76% to USD 1.49 mln as of end-1Q21.

Andriy Perederey: The company’s 1Q21 fundamentals were driven by a strong shell egg
price increase. The average shell egg price jumped 99% yoy to UAH 0.26/unit in
Ukraine. We expect that egg prices will correct in the second and third
quarters, but will remain stronger on a year-on-year basis, which will slow the
company’s revenue and EBITDA growth. We are keeping our neutral view on Ovostar
stock.