- ASTARTA published interim report for the first three months of 2019
ASTARTA published interim report for the first three months of 2019
For the first quarter of 2019 consolidated revenues of the Group grew by 28% to EUR 116 million y-o-y on back of solid performance by the agriculture and the soybean processing segments. With improved prices on grains and higher volume sales of corn the agricultural segment became the main contributor to the consolidated revenues (i.e. EUR 62 million, 2.4x higher y-o-y). As local and international sugar markets remained suppressed, the Company reduced volumes of sugar sales by 42% to 54 thousand tons. The Group’s EBITDA was up by 2% y-o-y to EUR 14 million, сash flow from operating activities grew by 87% y-o-y to EUR 40 million.
The segment was the biggest contributor to consolidated revenues with a 54% share. Revenues more than doubled to EUR 62 million on back of improved prices on key grain crops and higher volume sales of corn from the record harvest in 2018. Share of exports by volume was traditionally strong with 94% in the reporting period versus 83% in the same period last year. In the first quarter of 2019, ASTARTA was traditionally focused on the sowing campaign which had begun earlier due to favorable weather conditions and timely preparatory works. Several IT solutions were introduced to digitalize the farming process at all stages and to improve overall management and efficiency control over all farming subsidiaries.
The soybean processing segment generated revenues of EUR 24 million (+15% y-o-y), being the second largest contributor to the Group’s revenues. The sales volumes of soybean oil increased by 13% y-o-y to 14 thousand tons and soybean meal by 11% y-o-y to 47 thousand tons respectively. Price of soybean oil was down 9% y-o-y to EUR 555 per ton as the market grappled with plentiful supply of oils globally, while meal price increased by 10% to EUR 331 per ton.
Lower volume sales and prices resulted in decline of the segment revenues by 44% y-o-y to EUR 20 million in the reporting period. After two years of excessive sugar production in Ukraine the local sugar prices remained suppressed hitting the overall profitability of the industry. Following the increase of global sugar inventories international sugar prices in the first quarter of 2019 were also confined in low levels. In line with domestic trend ASTARTA responded to adverse market conditions by reducing sowing area under sugar beet by 12% y-o-y to 36 thousand hectares (Ukrainian farmers as of the day of the release planted 220 thousand hectares, 22 less y-o-y, according to the Ministry of agrarian policy and food of Ukraine).
Revenues of the dairy segment increased by 16% y-o-y to EUR 9 million on on favorable market conditions and improved quality of milk.