Ovostar revenue jumps 57%, EBITDA rises 42% in 9M18

Net revenue at Ukrainian egg producer Ovostar (OVO PW)
jumped 57.3% yoy to USD 94.7 mln and the company’s EBITDA rose 41.7% yoy to USD
17.3 mln in 9M18, according to the company’s interim report published on Nov.
15. Both segments drove revenue improvement – shell egg segment revenue
advanced 64.6% yoy to USD 67.8 mln and egg product segment revenue rose 47.5%
yoy to USD 26.9 mln in 9M18. Ovostar’s net income surged 74.1% yoy to USD 13.8
mln in 9M18.

In 3Q18, the company’s revenue increased 31.7% yoy to
USD 31.2 mln (up 5.4% qoq), while EBITDA decreased 32.6% yoy to USD 3.5 mln (or
a 18.9% qoq drop). Its net income slid 15.5% yoy to USD 3.4 mln (or an 11.8%
qoq improvement) in 3Q18.

Andriy Perederey: Ovostar’s 9M18 revenue slightly exceeded our expectations of a 55% yoy
increase. We expect the 3Q18
trend of smaller yoy EBITDA will continue in 4Q18, as the company’s cost
inflation will exceed the appreciation of the prices for its products, in yoy
terms. That said, we expect Ovostar’s 2018 EBITDA will reach USD 28 mln of
EBITDA in 2018, or 5% higher yoy. We remain neutral on Ovostar stock.