Ovostar Union, a vertically integrated holding company, one of the leading egg and egg products producers in Ukraine, has announced its unaudited financial and operational results for the first quarter ended 31 March 2012.
First quarter results for 2012 when compared to the first quarter 2011 are summarised below:
- Revenues increased by 27% to USD 15.7 mln;
- Gross profit increased by 76% to USD 9.6 mln;
- EBITDA increased by 59% to USD 9.4 mln;
- Net profit increased by 62% to USD 8.9 mln;
- Volume of eggs produced increased 22% to 174 mln eggs.
Revenues and gross profit
During the first quarter of 2012 Ovostar Union revenues increased by 27% compared to the first quarter of 2011, reaching US$ 15.7 mln. Revenues growth was supported by the increase in sales volume as well as egg and egg product prices. During Q1 2012 gross profit increased by 76% to US$ 9.6 mln as a result of lower realised raw material prices compared to Q1 2011 and continuing migration to more productive Hy-Line cross.
Operating profit, EBITDA and cash flow from operating activities
In Q1 2012 operating profit increased by 60% to USD 8.8 mln while EBITDA increased 59% reaching USD 9.4 mln when compared to Q1 2011. EBITDA margin increased to 60% compared to 48% realised during the Q1 2011. Net cash flow from operating activities reached USD 4.0 mln representing 123% increase from USD 1.8 mln in Q1 2011 mainly resulting from increased profitability.
Profit before tax and net profit
In Q1 2012 profit before tax increased by 62% to USD 8.9 mln while net profit increased by 62% to USD 8.9 mln when compared to Q1 2011.
As of 31 March 2012 the total flock reached 3.4 mln birds comparing to 2.5 mln birds as at 31 March 2011 (3.1 mln birds as at 31 December 2011).
In Q1 2012 the volume of eggs produced increased 22% when compared to Q1 2011 reaching 174 mln eggs. The volume of eggs sold increased by 13% when compared to Q1 2011 reaching 124 mln. The average egg price through Q1 2012 increased by 12% to USD 0.09* per 1 egg when compared to Q1 2011. Growth of egg price was attributed to increased demand for eggs on the local market.
Q1 2012 dry and liquid egg products sales volume amounted to 180 tons and 1,020 tons respectively comparing to 333 tons and 840 tons respectively in Q1 2011. The average dry egg products selling price increased by 7% to USD 5.36* per kg while the average liquid egg products selling price increased by 22% to USD 1.98* per kg when compared to Q1 2011. The price increase was mainly attributable to strong demand from existing and new customers. Decrease in volume of dry egg products produced in Q1 2012 was attributed to idle time on Ovostar egg processing plant in January 2012 due to commissioning of the new egg processing equipment.
Declared investment program
During Q1 2012 the Company continued to progress with its declared investment program. By 31 March 2012 reconstruction works on the young laying hens site have been completed, increasing total young laying hens capacity to 1.4 mln hen places. One more poultry house of 309 ths hen places has been launched on the laying hens site.
In the meantime the egg processing plant has been enhanced with new egg breaking, pasteurization and packaging equipment.
The Company’s CEO Borys Bielikov has noted:
“During the first quarter of 2012 we have achieved strong financial and operational results. Consolidation of industrial egg production market, higher egg and egg products prices alongside with increasing demand for liquid egg products from the key clients support the confidence in achieving 2012 targets”.
*All prices net of VAT (20%)
UAH/USD exchange rate (Q1 2012 average) = 7.9882