Ovostar Union PCL (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 three months ended 31 March 2019
Revenue, gross profit and gross margin
In Q1 2019 The Group’s revenue equaled USD 31.1 mln, demonstrating 8% fall YoY (Q1 2018: USD 33.9 mln). The dynamics is accounted for by the respective decrease of selling prices of eggs and eggs products.
In the reporting period the share of export sales went up to 58% of total revenues and reached USD 18.0 mln (Q1 2018: 43% and USD 14.4 mln respectively).
The gross profit in Q1 2019 equaled USD 7.8 mln, resulting in 25% gross profit margin (1Q 2018: USD 11.2 mln and 33%). The main factors that negatively influenced marginality are the reduction of selling prices of eggs and egg products alongside the increase of cost of sales.
Operating profit, EBITDA and cash flow from operating activities
The Group’s operating profit for the reporting period was USD 4.6 mln (Q1 2018: USD 8.8 mln). EBITDA fell respectively to USD 5.4 mln (Q1 2018: USD 9.5 mln). Net cash flow from operating activities during the 1Q 2019 was USD 4.4 mln (Q1 2018: USD 9.1 mln).
Over the 3 months 2019 net profit reached USD 4.5 mln (1Q 2018: USD 7.3 mln).
The Group’s CEO Borys Bielikov noted:
“The first quarter of 2019 proved to be challenging for the egg industry due to the reduction of selling prices both on local and export markets. With regard to the unfavorable market situation, the management believes that the results achieved by the Company in the reporting period are quite satisfying”