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Main Media Press releases Financial and Operational Results for the Nine Months Ended 30 Septem...

Financial and Operational Results for the Nine Months Ended 30 September 2012

15.11.2012

Press releases

5445

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 and operational results for the nine months ended 30 September 2012, as summarised below:

- Revenue increased by 16% over the same period last year to USD 40 mln;

- Gross profit increased by 15% to USD 17 mln;

- EBITDA increased by 10% to USD 16 mln;

- Net profit increased by 27% to USD 14 mln;

Financial results

Revenues, gross profit and gross margin

In 9M 2012 revenue of the Group increased by 16% YoY to USD 40 mln. Increase in revenue was attributed to the growth in volumes sold and selling prices of eggs and egg products as well as revenue from sunflower processing segment. Gross profit increased by 15% to USD 17 mln. Gross margin decreased to 42% from 43% in 9M 2011 as a result of higher realized feed cost in the 3rd quarter of 2012.

Operating profit, EBITDA and cash flows from operating activities

In 9M 2012 operating profit increased by 5% YoY to USD 14 mln while EBITDA increased by 10% YoY reaching USD 16 mln. Net cash flows from operating activities reached USD 9 mln compared to USD 3 mln in 9M 2011.

Net profit

In 9M 2012 net profit increased by 27% over the same period last year to USD 14 mln.

Operational and segment results

As at 30 September 2012 total flock amounted to 3.62 mln (including 2.71 mln laying hens) compared to total flock of 2.45 mln including 2.1 mln laying hens at 30 September 2011. In 9M 2012 egg production increased by 11% YoY to 491 mln while volume of eggs processed increased by 11% YoY to 176 mln. In 9M 2012 the Group processed 8,552 tons of sunflower seeds.

The volume of eggs sold reached 326 mln remaining at the level of 9M 2011 while the average egg price in 9M 2012 increased by 9% YoY to USD 0.079* per 1 egg. Egg segment contributed USD 27.4 mln to total revenue.

In 9M 2012 the Group sold 3,506 tons of liquid and 711 tons of dry egg products. The average liquid egg products selling price increased by 22% YoY to USD 1.89* per kg while the average dry egg products selling price increased by 9% YoY to USD 5.31* per kg. Egg products sales contributed USD 10.1 mln to total revenue.

In 9M 2012 sales of sunflower oil amounted to 2,676 tons at USD 1,021* per ton. Sunflower segment sales contributed USD 2.8 mln to total revenue.

Capital investment program

Over 9M 2012 Ovostar Union has been implementing the 2011-2012 expansion program thereby improving quality of production equipment and infrastructure. As initially declared, this investment program has been successfully completed in Q3 2012 with the launch of two laying hens houses of 309 ths hen places each in July and September 2012.

In June 2012, the Group has started implementation of the 2012-2013 investment program. In July 2012, new hatchery capacities of 460 ths incubation places have been launched thereby expanding total incubation capacity to 1 mln incubation places. In August 2012, egg sorting capacities of the Group have been increased by 180 ths eggs/hour to 400 ths eggs/hour with installation of a new egg sorting machine Moba Omnia 500. In September 2012, a young laying hens house of 135 ths hen places has been launched and fodder mill capacity has been expanded to 56 tons/hour from 36 tons/hour.

The Company CEO Borys Belikov has noted:

“Among the key achievements of Ovostar Union for the 9 months there are successful completion of the investment program which had been declared during the IPO as well as steady adherence to our chosen growth strategy. These prerequisites provide a solid basis for the Group’s competitiveness and strong operational and financial results in the future”.

*All prices are indicated net of VAT (20%)

UAH/USD exchange rate (9M 2012 average) = 7.9904

For investor relations inquiries please contact:

Kateryna Pavlovska

+38 050 411 33 37

e.pavlovskaya@invest.ovostar.ua

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