Ovostar EBITDA rises 15%, profit 19% in 9M15

Egg producer Ovostar Union (OVO PW) reported a 1% yoy increase in its net revenue to USD 52.9 mln in 9M15, according to its Nov. 12 filing. Sales in its core segment, shell eggs, increased 10% yoy to USD 39.6 mln, while its other segments reported declining revenue. The company’s EBITDA increased 15% yoy to USD 24.3 mln and its operating cash flow before working capital changes improved 23% yoy to USD 22.8 mln in 9M15. Ovostar’s 9M15 bottom line improved 19% yoy to USD 22.3 mln.

The company’s 9M results imply that in the third quarter alone, its net revenue increased 7% yoy (to USD 19.4 mln), EBITDA rose 10% yoy (to USD 8.4 mln) while its bottom line fell 15% yoy (to USD 6.4 mln).

Ovostar’s net debt remained nearly unchanged YTD at USD 7.2 mln, implying a net debt-to-LTM EBITDA ratio of 0.22x, among the lowest in Ukraine’s equity universe.

Alexander Paraschiy: As we expected, the company was able to keep a positive trend in most of its P&L indicators in 3Q15, while its growth rate declined as compared to 1H15. In the fourth quarter, Ovostar has a chance to improve its margin in its shell egg segment, in qoq terms, given a significant rise in egg prices in Ukraine. We maintain our view of Ovostar as one of our top picks among Ukrainian equities.