Avangard agro holding released official annual report on London Stock Exchange for the year of 2011. Company stated overall increase of net profit by 6.2% to USD 196.29 M. Revenue growth of 25.8% to the level of USD 553.81 M was partially attributed to 29.4% increase in exports numbers to USD 105.6 M. Main exporting targets were countries of the Asian region. We may note the tendency of Ukrainian agro holdings targeting foreign markets, more than that targeting Asian region (Reminder: MHP released annual report on Tuesday where 80% of sales accounted for exports to the Asian region).

Company also declared revenue growth of 25.8% to USD 553.31 M due to sales growth and growth of prices for egg products. EBITDA has seen
increase of 27% yoy reaching USD 245.8 M. Subsequently EBITDA margin reached 44.4% up mere 0.4% from 44% level of 2010. Company’s cash
balance at the end of the year was equal to USD 230.6 M up 25.9% compared to the previous year. Finally, company’s total debt equaled to USD
80.3 M, slight increase of 3.3%.

AgroInvest comment: Avangard has shown improvement in terms of sales volume and EBITDA growth, however almost the same EBITDA margin
of 44.4% leads to a conclusion that company’s costs rise proportionally to its revenues and management needs to take a closer look at
modernization of production process in order to increase its effectiveness. Administrative costs are to be taken into account as well.
 

AgroInvest