Ukraine Markets Daily (November 16, 2017)

Market news

  • MHP gained USD 238 mn of net profit for the nine months of 2017

Market comment

The UX index decreased by 0.2% yesterday and the PFTS index was down by 0.1% (in UAH terms). The WIG-Ukraine index decreased by 0.3%. On the interbank exchange market, the USD/UAH was down by 0.1% to UAH 26.48 (mid price), according to Thomson Reuters. The official exchange rate reported by the NBU was UAH 26.50

 

MHP gained USD 238 mn of net profit for the nine months of 2017

As was reported in the MHP’s unaudited report for the nine months of 2017, the Company’s total revenue increased by 18.1% y/y, while its net profit grew by 149% y/y. During the period, the Company’s total assets and total equity increased by 3.3% and 26.8% respectively, while total liabilities reduced by 8.4%. For the period ended September 30, 2017 MHP gained USD 970 mn (+18.1% y/y) of the revenue. The Company’s cost of sales had also increased to USD 684 mn (+12.4% y/y), resulting in gross profit growth up to USD 331 mn (+10.7% y/y). MHP’s operating profit was up to USD 318 mn (+14.8) and the net profit for the period reached USD 238 mn (x2.5 y/y). During the nine months of 2017, MHP’s non-current assets increased to USD 1,314 mn (+4.8% since the period beginning and current assets grew to USD 830 mn (+1.1%) resulting in the total assets extension to USD 2,145 mn (+3.3%) since the period beginning. The Company’s total equity grew up to USD 879 mn (+26.8%) while the total liabilities dropped to USD 1,266 mn (-8.4%).

Our view:

MHP’s net profit margin growth from 11.6% to 24.5% is a result of increased VAT refunds made by the government and of the foreign exchange gains received by the Company during the period. Such a significant net profit growth resulted in the total equity growth through the increased retained earnings, while the Company’s total liabilities reduced as a result of bank’s loans repayment. Improvements in the MHP’s financial performance are directly connected with the Company’s positions strengthening on the foreign markets and with the increased export volumes.

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Kind regards

Research Team

EMPIRE STATE CAPITAL PARTNERS