Ovostar Union N.V. (WSE: OVO) (hereinafter, the “Group”), a vertically integrated holding company, one of the leading egg and egg products producers in Ukraine, announces its financial results for the six months ended 30 June 2016.
Revenue, gross profit and gross margin
Over the 1H 2016 the Group’s revenue in USD terms increased by 3% year-on-year to mUSD 34.4 (1H 2015: mUSD 33.5). Gross profit decreased by 17% to mUSD 11.8 from mUSD 14.2 while gross margin amounted to 34%. Export sales revenue increased by 50% and amounted to 37% of total revenue over the reporting period.
Operating profit, EBITDA and cash flow from operating activities
Over the 6 months of 2016 operating profit decreased by 37% to mUSD 9.4 due to increase in selling expenses resulted from export sales growth together with significant decrease in income from special VAT treatment resulted from the amendments to the tax code. EBITDA decreased by 34% to mUSD 10.6 (1H 2015: mUSD 15.9) while EBITDA margin amounted to 31% year-on-year. Cash flow from operating activities amounted to mUSD 12.1 in the 1H 2016 (1H 2015: mUSD 12.7).
Net profit and exchange differences on translation to presentation currency
During the 6 months of 2016 net profit amounted to mUSD 9.1 (1H 2015: mUSD 15.9). Due to Ukrainian hryvnia devaluation during the 1H 2016, the Group has recorded negative exchange differences on translation to presentation currency in the amount of mUSD 3.2 that have been reflected in the income statement.
The Group’s CEO Borys Bielikov noted:
“The Management team of Ovostar Union is satisfied with operating and financial results that the Company achieved during the 1st half of 2016. Over the reporting period the export revenue increased by 50% y-o-y. However, we are especially pleased to emphasize that the increased volumes of liquid and dry egg products exported to the European Union generated 9% of the Company’s total revenue of 1H 2016. The Company continues following its organic growth strategy that forms a solid foundation for achieving pleasant results in future.”