Ovostar revenue rises 71%, EBITDA surges 85% in 1Q18

Egg producer Ovostar Union (OVO PW) reported a 71.0% yoy
revenue jump to USD 33.9 mln in 1Q18, according to the company’s May 15
filling. The increase was driven by export sales, which more than doubled yoy
to USD 14.4 mln. The export share in revenue reached 43% vs. 34% a year ago.

The company’s 1Q18 EBITDA surged 85% yoy to USD 9.5
mln, while its EBITDA margin improved to 28% in 1Q18 vs. 26% a year ago. Also,
its operating cash flow before working capital improved 2.2x yoy to USD 11.3
mln in 1Q18. And net profit jumped 70.6% yoy to USD 7.3 mln.

Andriy Perederey: The company’s 1Q18 results are close to our expectations of net revenue rising 65% yoy and EBITDA nearly
doubling yoy, based on the company’s operating update released earlier. Also,
the company sees positive dynamics in the selling prices for its all products
in both markets. We expect that favorable market conditions, combined with
strong export volumes, will be reflected in future improvement in Ovostar net
revenue and EBITDA in the next quarter. We remain neutral on Ovostar stock.