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10:32 AM Tuesday, July 17, 2018
Agriculture
Profits Jump 5 X at Ukraine’s Largest Sugar Producer
Exports at record level
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KYIV - Ukraine’s largest sugar producer, Astarta, reported a fivefold increase in net profit in 2016, to EUR 83 million, and posted record exports of 139,000 tons.

The export figure was almost four times higher than the previous year.

Astarta operates eight refineries with a daily processing capacity of more than 39,000 tons of sugar beets. Four plants are located in Poltava region, two in Kharkiv region, and one each in Vinnytsya and Khmelnytsky.

“We have achieved steady growth in sugar production volumes, which have increased almost 300% over the last five years,” the company reported.

Astarta's share of the Ukrainian sugar market in the 2016/17 agricultural year (August-September) is estimated at 25%. Its share of the soybean crushing market is forecast to be 21%.

Sugar production by Astarta, Ukraine's largest sugar producer (supplied)
Record grain and oilseed production

“We increased output of grains and oilseeds to a record 910,000 tons, harvested 2.6 million tons of sugar beet, and produced the largest volume of sugar in the company’s history – 505,000 tons,” Viktor Ivanchyk, the company’s founder and CEO, wrote in a letter to shareholders.

Its 2016 revenue growth was driven by higher sugar sales (+15% year/year to EUR 174.5 mln) and soybean processing (+48% year/year to EUR 75.0 mln). Its other segments -- farming and cattle -- showed moderate 3%-4% growth.

Export revenue reached 50% of the total in 2016, compared to 35% a year earlier. The dairy segment generated revenue of EUR 25 million, almost 4% higher year/year.

According to the company’s financial report, consolidated revenue last year rose by 17%, to EUR 369 million. Operating profit grew by almost 15.2% to EUR 124.43 million and gross profit climbed 10.3% to EUR 157.49 million.

Earnings before taxes, depreciation, and amortization (EBITDA) was up by 16%, to EUR 152 million, and net debt narrowed by 16% to EUR 146 million.

Growth potential for 2017

Alexander Paraschiy, head of research at Concorde Capital, said he expected Astarta to generate similar or slightly better year/year EBITDA in 2017, driven by robust sugar prices and further improvement in the operating efficiency.

“Astarta is one of the least leveraged companies in the Ukrainian universe,” he told the UBJ. “Keeping low leverage is important for any Ukrainian farming company, which may face a need to boost its spending and debt if an agri-land market is launched in Ukraine.”

He said Astarta’s shares have some growth potential in 2017.

Ivanchyk, the company’s CEO, also sees last year’s advances as a solid base for further growth.

Astarta, an agroindustrial holding, operates in Cherkasy, Chernihiv, Khmelniytstky, Poltava, Ternopol and Zhytomyr regions. In addition to the eight refineries, it runs farms with land holdings of about 250,000 ha as well as dairy operations.

With many lines of production, Astarta can save money by using such by products as beat pulp (supplied)

For comments and story tips, please contact UBJ Kyiv Correspondent Vitalii Dubenskyi at this email: vitalii.dubenskyi@theubj.com

April 12, 2017

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