Agriculture

Research

Agriculture
September 3, 2010Landkom — Smaller yields favor recommendation downgrade

Landkom International PLC is a Ukrainian producer of agricultural commodities including rapeseed, wheat, barley, sunflower, corn and soybeans. Recently, it published rapeseed harvest results, which were lower than expected. The reason for this decline was adverse weather conditions. We believe that Landkom will not be able to increase its crop yield by year end and thus we downgrade our forecasts on the other grain yields. Currently, its stock trades near its fair value and our aggregate valuation implies just a modest upside of 7%. We recommend HOLDing the stock with the target price of USD 0.16.

Agriculture
July 2, 2010Creativ – Ready to Utilize Capacities

The Creativ Group is a vertically integrated agricultural holding and a leading manufacturer of oils and fats in Ukraine. It should significantly improve its financial state showing in 2010 and thereafter due to a threefold increase in production capacities in 2H2009. The growing sales (+40% YoY in 2010) and the increasing margins (EBITDA +2.6 p.p YoY) indicate that Creativ is an attractive investment target. Additionally, the stock’s liquidity should improve soon as the Holding has recently announced plans to take a listing at local Ukrainian Exchange. We reiterate our BUY recommendation with a target price of USD 23.1 per DR.

Agriculture
June 8, 2010Astarta – Non-stop sugar

Astarta already has benefited from the 2009/10 season’s sugar price rally. However, we project that no significant slump should occur in the market and Astarta will benefit fully from its leadership position in the sugar market. The company’s ongoing investment, diversification and vertical integration will continue to enhance its value. With this report we present updated coverage on Astarta.

Agriculture
May 17, 2010Landkom – Site visit impressions

Coming back from Landkom’s operations, we decided to update our recent valuation of Landkom because of our improved outlook on financing availability and 2010–2011 operational results. We consider that stocks in Landkom though risky provide investors with high yield investment opportunity. We recommend BUYing stocks in Landkom with a fair price at USD 0.19 per share.

Agriculture
April 26, 2010Ukrainian grain producers: ready to pump investments

With this report, we decided to update the valuation of Ukrainian grain producing companies that, in our view, have a winning combination of the strongest positions in the Ukrainian market, together with good corporate governance and a well-built business structures.

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Daily monitor

Agriculture
September 2, 2010Early grain harvest results reached 29.5 mln tonnes

Ukrainian agricultural companies finished their early grain harvest campaign with 29.5 mln tonnes of grain, leguminous, and oil-seed crops, with an average yield of 2.47 tonnes per ha. Agricultural companies processed only 11.9 mln ha of sowing areas.

Agriculture
August 31, 2010Kernel [KER PW, U/R] posts flat results in FY10

Yesterday, Kernel [KER PW, U/R] posted its financial results for FY10. According to Company’s data, net income increased by 16% YoY to USD 152.7 mln (FY09: USD 132.0 mln). Revenue decreased by 3% YoY to USD 1,020.5 mln (FY09: USD 1,047.1 mln), while operating profit grew by 1% YoY to USD 168.2 mln versus USD 166.6 mln in FY09. EBITDA fell by 1% YoY to USD 188.1 (FY09: USD 189.6). The EBITDA margin remained flat at 18% in FY10.

Agriculture
August 27, 2010Astarta [AST PW, BUY] increased net income by 119% in 1H10

Yesterday Astarta [AST PW, BUY] held an analysts’ meeting, where it presented its financial and production results for the 1H10. According to the Company’s data, its net income increased by 119% YoY to EUR 41.0 mln (1H09: EUR 18.7 mln). Consolidated revenue increased by 85% YoY to EUR 86.0 mln (1H09: EUR 46.4 mln), while operating profit grew by 117% YoY to EUR 43.3 mln versus EUR 20.9 mln in 1H09. EBITDA was up 104% YoY to EUR 51.1 (1H09: EUR 25.1). The EBITDA margin grew from 54% in 1H09 to 59% in 1H10.

Agriculture
August 26, 2010Today Government of Ukraine will not consider grain export quotas

Today, according Nikolay Prisyagnuk, the Minister of agriculture of Ukraine, the Cabinet of Ministers will not consider the imposition of quotas on grain exports. Viktor Slauta, the vice-prime-minister, confirmed this fact.

Agriculture
August 26, 2010Avangard [AVGR LI, U/R] increased net income by 86% in 1H10

Yesterday Avangard [AVGR LI, U/R] posted strong financial results for the 1H10. According to Company’s data net income increased by 86% YoY to USD 61.9 mln (1H09: USD 33.4 mln). Revenue increased by 68% YoY to USD 165.9 mln (1H09: USD 98.6 mln), gross profit grew by 37% YoY to USD 55.4 mln versus USD 40.3 mln in 1H09. EBITDA margin remains high, however it decreased to 38% from 44% in 1H09.

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