30 May 2013 07:00
30 May, 2013
AVANGARDCO INVESTMENTS PUBLIC LIMITED
FINANCIAL AND OPERATIONAL RESULTS FOR THE FIRST QUARTER OF2013
Кyiv, Ukraine - AVANGARDCO INVESTMENTS PUBLIC LIMITED (LSE: AVGR) (the «Company» or «AVANGARDCO IPL»), the largest producer of shell eggs and egg products in Ukraine and number one producer in Eurasia, today announces its financial and operational results for the three months ended March 31, 2013.
Financial Highlights
§ Revenue increased by 6.3% year-on-year to US$155.8 mln (Q1 2012: US$146.6 mln)
§ EBITDA was down by 13.3% year-on-year to US$73.1 mln (Q1 2012: US$84.3 mln), with EBITDA margin of 46.9%
§ Net profit decreased by 16.0% year-on-year to US$60.7 mln (Q1 2012: US$72.2 mln)
Operational Highlights
§ Total flock increased by 4.6% year-on-year to 27.2 mln (Q1 2012: 26.0 mln). The number of laying hens grew by 8.8% year-on-year to 22.3 mln (Q1 2012: 20.5 mln)
§ Production of shell eggs was up by 6.6% year-on-year to 1.654 bln (1Q 2012: 1.551 bln)
§ The average selling price or shell eggs fell by 8.1% year-on-year and amounted to UAH 0.68 per unit, excluding VAT (Q1 2012: UAH 0.74 per unit, excluding VAT)
§ The production of dry egg products slightly grew by 0.3% year-on-year reaching 271 mln eggs in egg equivalent (Q1 2012: 270 mln eggs)
§ The average sale price of dry egg products increased by 1.4% year-on-year to US$7.71/kg (Q1 2012: US$7.60/kg)
Irina Marchenko, Chief Executive Officer of AVANGARDCO IPL, commented:
"In the first quarter of 2013 the Company demonstrated 6.3% growth in revenues mainly as a result of the two times increase in the dry egg products sales compared to the first quarter of 2012. However, the Company experienced a decline in its profitability as a result of the decrease in average sales price of shell eggs due to the late arrival of Easter this year in the second quarter of 2013.
Export revenues were up 80% year-on-year and accounted for 23.1% of total revenues, mainly due to the increase in export sales of dry egg products.
The Company has continued to expand its sales channels and grow sales of Kvochka-branded eggs.
During 2013 we will continue to expand production volumes through increasing poultry flock and our gradual launch of new capacities of the production facilities at "Avis" and "Chornobaivske". In addition, we will seek to maintain our market leading position in Ukraine as well as continuing to increase our international presence and export sales. We believe all these factors combined will have a positive impact on the Company's financial results in 2013."
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There will be a conference call and webcast for analysts and investors today at 9.00 am US Eastern time, 14.00 pm UK time, 16.00 pm Kiev time and 17.00 pm Moscow time.
Name: | AVANGARD Q1 RESULTS CONFERENCE CALL |
ID: | 86520714 |
UK Free call | 08006 940 257 |
Russia Free call | 8108 002 097 2044 |
USA Free call | 1866 966 9439 |
Standard International | +44 (0) 1452 555 566 |
A live webcast of the presentation will be available at:
http://wcc.webeventservices.com/r.htm?e=627531&s=1&k=3A15CC456308228351F747AEF256078E&cb=blank
Please register approximately 15 minutes prior to the start of the call.
# # #
For investor relations enquiries:
Valeriya Myagkohod
AVANGARDCO IPL
Investor Relations Manager
phone.: +38 044 393 40 50
mob.: +38 067 223 46 88
e-mail: ir@avangardco.ua
FTI Consulting London Larisa Kogut-Millings +44 20 72 69 71 53
|
FTI Consulting Moscow Oleg Leonov +7 495 795 06 23
|
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Information for editors
AVANGARDCO IPL is one of the largest agro-industrial companies in Ukraine, specializing in the production of eggs and egg products. Based on figures for the year 2012, the Company holds a 33% share of the Ukrainian egg market (52% of the industrial egg market) and an 88% share of the Ukrainian egg products market. As of 31 March 2013, the total poultry stock of the Company was 27.2 million heads. The Company's plants are located in 14 regions of Ukraine and the Autonomous Republic of Crimea. In 2012 the Company exported its products to 32 countries, generally to the Middle East, Asia and CIS. As of 31 March 2013, revenues amounted to US$155.8 mln (Q1 2012: US$146.6 mln) and EBITDA was US$73.1 mln (Q1 2012: US$84.3 mln).
The Company's shares, in the form of Global Depositary Receipts, have been traded on the London Stock Exchange since May 2010. Eurobonds of around US$200 mln with a maturity on 29 October 2015 were included in the official list of the UK Listing Authority (UKLA) and admitted to trading on a regulated market of the London Stock Exchange since November 1, 2010.
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Financial Summary
Units | Q1 2013 | Q1 2012 | Change, % | |
Revenue | US$ '000 | 155,823 | 146,558 | 6,3 |
Gross Profit | US$ '000 | 62,198 | 73,558 | 15,4 |
Gross Profit Margin | % | 39.9% | 50.2% | -10,3 pps |
EBITDA | US$ '000 | 73,103 | 84,286 | -13,3 |
EBITDA Margin | % | 46.9% | 57.5% | -10,6 pps |
Operating Profit | US$ '000 | 69,438 | 80,456 | -13,7 |
Operating Margin | % | 44.6% | 54.9% | -10,3 pps |
Net Profit | US$ '000 | 60 699 | 72 246 | -16,0 |
Net Profit Margin | % | 39,0% | 49,3% | -10,3 pps |
In the first quarter of 2013, the Company's total revenue was up by 6.3% year-on-year and amounted to US$155.8 mln (Q1 2012: US$146.6 mln) mainly due to the increase in sales volumes of dry egg products.
The Company's export revenues increased by 80% year-on-year to US$36.0 mln (Q1 2012: US$20.0 mln) and equals to 23.1% of the Company's total revenue (Q1 2012: 13.6%).
In the first quarter of 2013, EBITDA was down by 13.3% year-on-year to US$73.1 mln (Q1 2012: US$84.3 mln) due to the decrease in selling price of shell eggs by 8.1% in the first quarter of 2013 and as a result of the increase of the cost of the Company's main products. The Company's EBITDA margin was negatively impacted by these factors and stood at 46.9% (Q1 2012: 57.5%).
Net profit for the first quarter of 2013 year decreased by 16.0% year-on-year to US$60.7 mln (Q1 2012: US$72.2 mln).
Segment Review
Units | Q1 2013 | Q1 2012 | Change, % | |
Total Poultry Flock | Heads (mln) | 27.2 | 26.0 | 4.6 |
Laying Hens | Heads (mln) | 22.3 | 20.5 | 8.8 |
The total poultry flock was up by 4.6% year-on-year, with the population of laying hens increasing by 8.8% year-on-year due to the gradual launch of new capacities at poultry complexes "Avis" and "Chornobaivske".
As at March 31, 2013, 40% of the total poultry flock was housed at new poultry complexes (35% of the total population of laying hens).
ShellEgg Segment
Units | Q1 2013 | Q1 2012 | Change, % | |
Total Production | Pieces (mln) | 1,654 | 1,551 | 6.6 |
Total Sales to Third Parties | Pieces (mln) | 1,315 | 1,203 | 9.3 |
Export | Pieces (mln) | 102.6 | 110.8 | -7.4 |
Average Sales Price | UAH (excl. VAT) | 0.68 | 0.74 | -8.1 |
In the first quarter of 2013, the production volume of shell eggs increased by 6.6% year-on-year due to the increase in the number of laying hens.
Sales to external customers were up by 9.3% year-on-year to 1.315 bn units. The Company's revenue in the shell egg segment was US$111.1 mln (Q1 2012: US$ 111.3 mln) and accounted for 71.3% of the total revenues.
In the first quarter of 2013, the average selling price decreased by 8.1% year-on-year due to Orthodox Easter falling later than usual in the calendar and also due to a slight decline in shell egg export volumes.
During the first quarter of 2013, the Company decreased its export volumes of shell eggs by 7.4% year-on-year to 102.6 mln units (Q1 2012: 110.8 mln units) due to the suspension of shipments to Syria as a result of the conflict in the region. As of today, the export to Syria has been resumed. During the reporting period, the Company exported its shell eggs to markets in the Middle East, North Africa and Asia.
In the first quarter of 2013, the share of shell eggs sales through retail chains (supermarkets) grew to 35% of total sales to third parties (Q1 2012: 31%).
In the first quarter of 2013, sales of packaged eggs under the umbrella brand "Kvochka" increased further to 12.2 mln units, which was 9% higher compared to the first quarter of 2012. From February 2013, the Company secured greater distribution of its "Kvochka"-branded products through regional retail chains, including RealMarket, TopMart, Obzhora, Bum and others in Odessa, Donetsk and Kyiv regions. As a result, at the end of the first quarter of 2013 the Company supplied its "Kvochka"-branded products to more than 2,400 retail outlets. The Company continues to strengthen its regional presence throughout its network of distributors.
Egg Products Segment
Units | Q1 2013 | Q1 2012 | Change, % | |
Processed Shell Eggs | Pieces (mln) | 271 | 270 | 0.3 |
Average Sales Price | US$/Kg (excl. VAT) | 7.71 | 7.60 | 1.4 |
During the first quarter of 2013 "Imperovo Foods" plant operated at full capacity. The volume of eggs processed amounted to 271 mln units (Q1 2012: 270 mln units).
The average sales price for dry egg products increased by 1.4% year-on-year to US$7.71 per kg (Q1 2012: US$7.60 per kg).
During the first quarter of 2013, the sales of dry egg products increased by 116.6% compared to the same period last year and amounted to 3314 tons.
The Company's revenue in the egg products segment was up by 106% to US$25.6 mln (Q1 2012: US$12.4 mln) and accounted for 16% of the total revenues.
During the reporting period, the Company continued to export its dry egg products to markets in the Middle East and Asia.
Investment Projects
The Company continues to make progress with the construction of its two poultry complexes for egg production, "Avis" and "Chornobaivske" in Khmelnytsky and Kherson regions and the capacity expansion project at the egg processing plant "Imperovo Foods" LLC. The construction and assembly works are going on according to the schedule.
Investor Site Visit
Between June 27 and 29, 2013 AVANGARDCO IPL will hold a two-day site visit which will allow all interested investors to take a tour of select assets owned by Ukrlandfarming PLC and AVANGARDCO IPL.
During the visit, the management teams of Ukrlandfarming PLC and AVANGARDCO IPL will provide detailed presentations for attendees to gain a better insight into its operations and strategy, as well as answer any questions.
Our business agenda will culminate with a dinner hosted by the Board of Directors to celebrate the occasion of Avangard's 10th anniversary.
If you wish to hear more about this upcoming site visit or would like to attend please contact FTI Consulting Avangard@fticonsulting.com.
- The End -
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2013
(in USD thousand, unless otherwise stated)
Note | 31 March 2013 | 31 December 2012 | |
ASSETS | |||
Property, plant and equipment | 978 555 | 920 072 | |
Non-current biological assets | 48 440 | 46 724 | |
Deferred tax assets | 1 966 | 1 966 | |
Other non-current assets | 4 | 55 | 391 |
Total non-current assets | 1 029 016 | 969 153 | |
Inventories | 6 | 161 463 | 177 886 |
Current biological assets | 59 398 | 56 889 | |
Trade accounts receivable, net | 7 | 63 162 | 55 551 |
Prepaid income tax | 25 | 18 | |
Prepayments and other current assets, net | 8 | 50 291 | 11 966 |
Taxes recoverable and prepaid | 5 | 102 297 | 102 567 |
Cash and cash equivalents | 9 | 155 058 | 204 298 |
Total current assets | 591 694 | 609 175 | |
TOTAL ASSETS | 1 620 710 | 1 578 328 | |
EQUITY | |||
Share capital | 13 | 836 | 836 |
Share premium | 13 | 201 164 | 201 164 |
Reserve capital | 13 | 115 858 | 115 858 |
Retained earnings | 959 151 | 899 357 | |
Effect of translation into presentation currency | (67 391) | (68 135) | |
Equity attributable to the owners of the Company | 1 209 618 | 1 149 080 | |
Non-controlling interest | 19 020 | 18 115 | |
Total equity | 1 228 638 | 1 167 195 | |
LIABILITIES | |||
Long-term loans | 10 | 50 584 | 3 969 |
Long-term bond liabilities | 11 | 196 102 | 195 779 |
Deferred tax liabilities | 72 | 72 | |
Deferred income | 4 970 | 5 047 | |
Long-term finance lease | 1 124 | 1 283 | |
Total non-current liabilities | 252 852 | 206 150 | |
Short-term bond liabilities | 16 | 25 022 | 25 023 |
Current portion of non-current liabilities | 13 | 14 677 | 32 114 |
Short-term loans | 12 | 50 000 | 94 368 |
Trade payables | 14 | 18 071 | 24 435 |
Other accounts payable | 15 | 31 450 | 29 043 |
Total current liabilities | 139 220 | 204 983 | |
TOTAL LIABILITIES | 392 072 | 411 133 | |
TOTAL EQUITY AND LIABILITIES | 1 620 710 | 1 578 328 | |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE 3 MONTHS ENDED 31 MARCH 2013
(in USD thousand, unless otherwise stated)
3 months ended | |||
Note | 31 March 2013 | 31 March 2012 | |
Revenue | 17 | 155 823 | 146 558 |
Profit from revaluation of biological assets at fair value | 8 841 | 7 131 | |
Cost of sales | 18,19 | (102 466) | (80 131) |
GROSS PROFIT | 62 198 | 73 558 | |
General administrative expenses | 20 | (3 961) | (8 343) |
Distribution expenses | 21 | (3 965) | (3 722) |
Income from government grants and incentives | 76 | 75 | |
Income from special VAT treatment | 13 097 | 17 089 | |
Other operating income/(expenses), net | 22 | 1 993 | 1 799 |
PROFIT FROM OPERATING ACTIVITIES | 69 438 | 80 456 | |
Finance income | 23 | 42 | 253 |
Finance costs | (8 756) | (8 462) | |
Bargain purchase | - | - | |
PROFIT BEFORE TAX | 60 724 | 72 247 | |
Income tax credit/(expense) | (25) | (1) | |
PROFIT FOR THE PERIOD | 60 699 | 72 246 | |
OTHER COMPREHENSIVE INCOME FOR THE PERIOD: | |||
Effect of translation into presentation currency | 744 | 379 | |
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD | 61 443 | 72 625 | |
PROFIT FOR THE PERIOD ATTRIBUTABLE TO: | |||
Owners of the Company | 59 794 | 71 051 | |
Non-controlling interests | 905 | 1 195 | |
PROFIT FOR THE PERIOD | 60 699 | 72 246 | |
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO: | |||
Owners of the Company | 60 538 | 71 430 | |
Non-controlling interests | 905 | 1 195 | |
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD | 61 443 | 72 625 | |
Earnings per share, USD (basic and diluted) | 9 | 11 | |
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE 3 MONTHS ENDED 31 MARCH 2013
(in USD thousand, unless otherwise stated)
3 months ended | |||
31 March 2013 | 31 March 2012 | ||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Profit before income tax | 60 724 | 72 246 | |
Adjustments for: | |||
Depreciation of property, plant and equipment | 3 669 | 3 830 | |
Change in allowance for irrecoverable amounts | 2 | 542 | |
Other provisions | (223) | (2) | |
Loss on disposal of current assets | 142 | - | |
Loss on disposal of property, plant and equipment | 135 | 19 | |
Impairment of current assets | 21 | 277 | |
Other income | (709) | - | |
Effect of fair value adjustments on biological assets | (8 841) | (7 131) | |
Gains realised from accounts payable written-off | (13) | (110) | |
Amortization of deferred income on government grants | (76) | (74) | |
Loss from VAT government bonds sale | - | (2 054) | |
Discount on long-term bonds amortization | 323 | 291 | |
Bargain purchase | - | ||
Interest income | (42) | (253) | |
Interest payable on loans | 8 810 | 7 718 | |
Operating profit before working capital changes | 63 922 | 75 299 | |
(Increase)/decrease in trade receivables | (7 611) | (20 039) | |
Decrease in prepayments and other current assets | (38 327) | 1 170 | |
Increase in taxes recoverable and prepaid | 270 | 631 | |
Decrease/(increase) in inventories | 16 260 | 1 271 | |
Increase in deferred income | (1) | (9) | |
Decrease in other non-current assets | 336 | - | |
Increase/(decrease) in trade payables | (6 351) | 3 830 | |
Decrease in biological assets | 4 616 | 6 900 | |
Decrease in finance leases | (158) | - | |
Increase/(decrease) in other accounts payable | 6 352 | 26 | |
Cash generated from operations | 39 308 | 69 079 | |
Interest paid | (3 251) | (1 829) | |
Income tax paid | (32) | 1 | |
Net cash generated from operating activities | 36 025 | 67 251 | |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Payments and receipts - property, plant and equipment | (60 301) | (42 273) | |
Payments for prepayments of property, plant and equipment | - | ||
VAT government bonds sale | - | ||
Acquisitions of subsidiary | - | ||
Interest received | 42 | 253 | |
Net cash used in investing activities | (60 259) | (42 020) | |
CONSOLIDATED STATEMENT OF CASH FLOWS (CONT.)
FOR THE 3 MONTHS ENDED 31 MARCH 2013
(in USD thousand, unless otherwise stated)
3 months ended | |||
31 March 2013 | 31 March 2012 | ||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
New loans received | 14 700 | 6788 | |
Repayment of loans | (29 891) | -675 | |
Interest paid for bonds issued | (9 815) | -1318 | |
Proceeds from short-term bonds issued | - | ||
Blocked deposit | - | -4977 | |
Net cash generated from financing activities | (25 006) | (182) | |
Net (decrease)/increase in cash | (49 240) | 25 049 | |
Cash and cash equivalents at 1 January | 203 504 | 237 814 | |
Effect from translation into presentation currency | - | - | |
Cash and cash equivalents at 31 December | 154 264 | 262 863 | |