Avangard released Q1 2012 results showing net income gain of 9.8% to the level of UAH 2.11 M (USD 264 K) compared to the Q1 2011. Company’s profit rose 41% to the level of UAH 11.4 M, while net revenues actually dropped 25.4% to UAH 29.01 M. After thorough research on the topic we came to conclusion that despite recent increase in sales volume, including increase of exports volume, average drop of price per egg was the main factor for decline of net revenues. We also assume overall improvement of profit levels due to economy-of-scale principle as increased volumes with similar costs led to improvements.

AgroInvest comment: Company has proven its effective management system as despite the drop in prices of the egg products it was able to reach positive results yoy. Avangard has been on the spotlight recently attracting potential USD 4 Bn investment from China. We will continue carefully monitoring the progress of the group.

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