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15:23 PM Thursday, September 21, 2017
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UBJ AM Aug. 25, 2017
James Brooke
Business profits up 44%; Ukrzaliznytsia may lease up to 30 locomotives from GE; US OPIC may extend political risk coverage to $250 million American loan for Energoatom nuclear storage project
image/svg+xml Kyiv Lutsk Rivne Zhytomyr Lviv Ternopil Khmelnytskyi Uzhgorod Chernivtsi Vinnytsia Chernigiv Sumy Kharkiv Poltava Cherkasy Kirovohrad Lugansk Dnipropetrovsk Donetsk Zaporizhzhia Mykolaiv Odesa Kherson Simferopol Sevastopol Ivano- Frankivsk

• Profits of Ukraine’s medium and large-sized businesses jumped by 44.2% during the first half of this year, according to the State Statistical Service, Gosstat. Profits amounted to about $10 billion. During the same six months, year over year, losses fell by one third, to about $3.2 billion.

• The US Overseas Private Investment Corporation, or OPIC, may extend political risk insurance coverage to a $250 million loan raised by Energoatom to build a central storage facility for spent nuclear fuel. Energoatom seeks to raise $250 million from Bank of America Merrill Lynch by October 2017 to build the facility. A US company, Holtec International, is to supply engineering, storage, transfer and transportation canisters, and related equipment. The OPIC Board is to vote on the project Sept. 14. Once operational, the facility would cut reliance on Russia for storage and would save Energoatom $50 million a year.

• Ukraine’s state railway, Ukrzaliznytsia, is negotiating leasing 20 to 30 locomotives from General Electric, the railway’s financial director, Andrey Ryazantsev, told Ukrinform. The railway is negotiating financing with American and local banks and hopes to get the new locomotives in place by next summer. The locomotives probably would come from a GE join venture factory in Kazakhstan.

• US Energy Secretary Rick Perry will pay a one day working visit to Ukraine next Tuesday, August 29, according to Oleh Ustenko, Executive Director of the Bleyzer Foundation.

• Ukraine's major state-run firms returned to profit last year after four consecutive years of decline, according to official data. Ukraine’s 94 largest government-owned companies posted a consolidated profit of $1 billion U.S. dollars, compared to a 2015 loss of $2.1. billion. Most of the change came from Ukraine's largest state company, Naftogaz which ended 2016 with a $880 million profit, compared to a $1.4 billion dollar in 2015. Maksym Nefyodov, First Deputy Economic Development and Trade Minister, told reporters: "The most profit-making assets are national joint-stock company Naftogaz Ukrainy, Ukrenergo, Ukrainian Sea Port Authority, Ukrhydroenergo, Pivdenne (Yuzhnoye) Design Bureau (Dnipro).”

• Industrial production in Ukraine fell 2.6% in July year over year, after growing in May and June, according to Gosstat. Overall, from January to July, industrial production in Ukraine decreased 0.7% year-over-year. Last year, industrial production in Ukraine in 2016 grew by 2.4% after a four-year decline: in 2015 it fell by 13%, in 2014 by 10.1%, in 2013 by 4.3%, and in 2012 by 0.7%.

• The national treasury has received the equivalent of almost $50 million from last week’s sales of three 25 percent stakes in three state-owned regional power companies, State Property Fund of Ukraine reports. Ornex, part of the SCM Group, bought the shares in Kyivenergo, Zakhidenergo and Donetskoblenergo.

• Ukraine’s State Property Fund has sold a 99.5% stake in the Ivano-Frankivsk Locomotive Overhaul Plant at its starting price of UAH 33.9 million. The buyer was the Ivano-Frankivsk City Council. Alexander Paraschiy of Concorde Capital writes: “August is going to be the best month in the last four years for Ukraine’s privatization agency. With four 25%-99% stakes already sold, the fund has accumulated UAH 1.35 bln in privatization proceeds this month, which is more than for the three previous years cumulatively (UAH 0.95 bln).”

• Ukrainian cyber security firm ISSP may have detected a new computer virus distribution campaign, Reuters reports. As with the June NotPetya computer virus, the new malware seems to originate in accounting software.

• Ukrainian startup DMarket, a blockchain marketplace selling items from virtual games, has raised $11.5 million of investment at the first phase of the Initial Coin Offering, DMarket has said on its website. About 2.2 billion people play computer games daily.

• Enis Hulli writes in Medium: The number of “switchers” -- people who switch from any industry to IT -- has increased by five fold since 2014.Ukraine plans to boost its annual crop of tech graduates from 40,000 today to 100,000 by 2020

• Reversing a decline, trade with Russia rebounded during the first half of this year. Exports to Russia were up 26.4% and imports were up 41.5 %. Geography and historical trade ties seem to trump elevated trade tariffs, said Natalia Mikolska, Ukraine’s trade representative.

• In advance of the new Canada-Ukraine free trade pact, exports of Ukrainian goods jumped 76.3% during the first half of this year, compared to the same period in 2016, Natalia Mykolska, Ukraine’s trade representative, told Interfax. Ukraine’s exports totaled $22.7 million for the period. The free trade pact went into effect on Aug. 1.

• Lavina Mall, Ukraine’s largest shopping and entertainment center, reports that tenant revenue increased by 14 percent in July, over June. Both are traditionally slow retail months. Revenue in June was 22 percent higher than in May. With 170,280 sq.m., the mall has about 300 stores, an indoor family entertainment center, and the nation’s largest cinema complex, with 13 screens.

• A Ukrainian airline plans to start charter flights from Kyiv to Cairo on Sept. 7. Ukraine International Airlines plans to start a direct flight on that route next spring, according to Hennadii Latii, Ukraine’s ambassador to Egypt. Last year, he told reporters in Cairo, 450,000 Ukrainians vacationed in Egypt. He said that between 25 and 30 flights a week fly from Ukrainian cities to Sharm el-Sheikh and about 30 flights to Hurghada.


For comments or story tips, please contact UBJ Editor in Chief James Brooke at james.brooke@theubj.com

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