Stirol reports worrying 1H12 results

Stirol (STIR UK), Ukraine’s leading fertilizer producer, reported extremely weak 1H12 results yesterday. The company posted a 9x yoy increase in net loss to USD 158 mln, on a 8x yoy increase in negative EBITDA to USD 141 mln. Revenues improved 32% yoy to USD 399 mln, mainly on a corresponding increase in fertilizer output. The sharp increase in losses nearly ate away the company’s book value of equity (down to USD 2 mln as of end-1H12), which escalated Net Debt/Equity ratio to 47x. If the trend continues, Stirol’s equity will turn negative next quarter. Yet another worrying sign – Stirol’s payables doubled YTD to USD 552 mln, the equivalent of nine-months of revenue.