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 first half of 2012, as summarised below:
- Revenues increased by 26% to USD 28 mln;
- Gross profit increased by 57% to USD 14 mln;
- EBITDA increased by 43% to USD 13 mln;
- Net profit increased by 42% to USD 12 mln;
- Volume of eggs produced amounted to 324 mln eggs;
- Volume of eggs sold amounted to 226 mln eggs;
- Average price for eggs increased by 12% to USD 0.082*/egg;
- Volume of egg products sold amounted to 2,522 tons;
- Average price for liquid egg products increased by 24% to USD 1.94*/kg;
- Average price for dry egg products increased by 14% to USD 5.39*/kg.
Revenues, gross profit and gross margin
In H1 2012 revenue of the Group increased by 26% compared to the first half of 2011, reaching USD 28 mln. Revenue growth was supported by the increase in egg and egg product prices as well as revenue from sunflower processing segment. During H1 2012 gross profit increased by 57% to USD 14 mln as a result of lower realized fodder cost compared to H1 2011. Gross margin increased to 49% from 39% in H1 2011.
Operating profit, EBITDA and cash flow from operating activities
In H1 2012 operating profit increased by 42% YoY to USD 12 mln while EBITDA increased by 43% YoY reaching USD 13 mln. Net cash flow from operating activities reached USD 9 mln compared to USD 2 mln in H1 2011.
In H1 2012 net profit increased by 42% YoY to USD 12 mln.
As of 30 June 2012 the total flock reached 3.5 mln birds comparing to 2.5 mln birds as at 30 June 2011 (3.1 mln birds as at 31 December 2011).
In H1 2012 the volume of eggs produced increased by 12% YoY to 324 mln eggs. The volume of eggs sold reached 226 mln remaining at the level of H1 2011 but this has been offset by the increase in the average egg price in H1 2012 by 12% to USD 0.082* per 1 egg when compared to H1 2011.
In H1 2012 the Group sold 2,133 tons of liquid and 389 tons of dry egg products. The average liquid egg products selling price increased by 24% to USD 1.94* per kg while the average dry egg products selling price increased by 14% to USD 5.39* per kg when compared to H1 2011. The price increase was mainly attributable to strong demand from existing customers. The Group sold less dry egg products in H1 2012 due to Ovostar egg processing plant working below capacity in January and February 2012 caused by installation and commissioning of new egg breaking, pasteurization and packaging equipment.
Capital investment programs
In H1 2012, as a part of the declared investment program, three laying hens houses of 309 ths hen places have been launched on laying hens site and two young laying hens houses of 130 ths hen places have been launched on young laying hens site. In February 2012, expanded capacities of egg processing plant have been installed. The 2011-2012 investment program will be completed by 10 September 2012. Laying hens flock settlement of the last building will be finalized by the end of September 2012.
In June 2012 the Group has commenced a new phase of production capacities expansion that will allow by the end of 2013 to install additional 1.5 mln laying hens places furnished with the most up to date equipment. This expansion of capacities is very similar to the 2011-2012 investment program and it will fully complete reconstruction of Poultry Farm Ukraine production site.
The Company CEO Borys Bielikov has noted:
“Our operating and financial performance in H1 2012 supports growth target laid out in the beginning of 2012. We are delighted with the achieved results and look forward to a successful second half of the year.
We shall proceed with the chosen development strategy employing most up to date industrial poultry technologies.
Meanwhile, the Group’s 2011-2012 investment program will be successfully completed by 10 September 2012 marking an important strategic milestone that has been achieved by Ovostar Union since the IPO on the WSE”.
*All prices net of VAT (20%)
UAH/USD exchange rate (H1 2012 average) = 7.9890
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