Capitalization of Ukrainian agroholdings in Q1 2019 16 April, 2019 at 14:04

In Q1 2019, capitalization of Ukrainian agroholdings listed on foreign exchanges generally followed an upward trend. Its amount was above EUR 2.4 Bl during most of this time period, reports UkrAgroConsult.

The agroholdings entered 2019 with capitalization at EUR 2.36 Bl. It had reached EUR 2.5 Bl by March 20, but slumped on the last days of the month (EUR 2.3 Bl on March 28) and then restored to EUR 2.37 Bl on March 29.

The capitalization level is determined by the market value of major agroholdings. The largest ones – MHP and Kernel – set its trend. They accounted for 78.4% of the total capitalization as of March 29.

The Q1 curve of the total capitalization of agroholdings noticeably plunged on the last days of March and actually matched changes in the capitalization of MHP. 

This decline can be explained by the March 20 publication of the agroholding’s 2018 financial statement, where its pretax profit (EBITDA) was indicated down 2% and net profit down 44%. The market value of MHP recovered in early April.

Other three major agroholdings – Astarta, Ovostar, MMK – completed the trend formation, as they accounted for a combined 17.3% of the total capitalization. Rapid sustainable capitalization growth in the period under review was shown by Milkiland. Its market value almost doubled from EUR 1.6 Ml (Jan. 02, 2019) to EUR 3.56 Ml (March 29, 2019). However, because of a small share, its level does not actually influence the overall movement in the capitalization of agroholdings.

Comparing the capitalization in Q1 2019 against the same time period in 2018, we should point out that it had lost roughly EUR 200 Ml by the beginning of the year and some EUR 350 Ml by the end of the quarter.

At the same time, the trend during the quarter under review was upward.

The operational conditions and results in Ukraine underwent no dramatic changes in the above-mentioned time periods, therefore they could not affect the market value of Ukrainian public agroholdings that much.

In UkrAgroConsult’s opinion, its decline in Q1 2019 resulted mostly from:

  1. sliding indexes of stock exchanges during last year
  2. risks related to the zloty’s exchange rate.