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 2017.
Revenue, gross profit and gross margin
Over the 1H 2017 the Group’s revenue in USD terms increased by 6% year-on-year to mUSD 36.5 (1H 2016: mUSD 34.5). Gross profit decreased by 28% to mUSD 8.5 partially due to the decrease in fair value change of biological assets in the amount of USD 1.7 million y-o-y. Consequently, the gross margin amounted to 23%. Export sales revenue increased by 16% and amounted to 41% of total revenue over the reporting period.
Operating profit, EBITDA and cash flow from operating activities
Over the 6 months of 2017 operating profit decreased by 40% to mUSD 5.7 due to consistent gradual growth in export sales, which require additional selling expenses. EBITDA decreased by 33% to mUSD 7.0 (1H 2016: mUSD 10.5) while EBITDA margin amounted to 19% year-on-year. Cash flow from operating activities amounted to mUSD 8.1 in the 1H 2017 (1H 2016: mUSD 12.1).
During the 6 months of 2017 the Group has recorded USD 1.6 million of foreign currency exchange loss. The net profit amounted to mUSD 3.9 (1H 2016: mUSD 9.1).
The Group’s CEO Borys Bielikov noted:
“Over the 1H 2017 Ovostar Union continued to increase its production and sales volumes. The Management team of the Group managed to further expand the export volumes and raise the share of export sales in total revenue to 41%. Taking into account the current trends we are being optimistic about the Group’s results for the year in total.”