Agriculture
May 27, 2014
Despite strong financials in 1Q14, Ovostar’s earnings are set to come under the hammer for the remainder of the year as the sharp hryvnia devaluation bites into its margins. With an overwhelming 93% share of its revenue earned in UAH and some 70% of its cost linked to USD, we expect the company’s EBITDA to plunge by 40% YoY to USD 21mn in FY14. In light of the lowered earnings forecast along with the impending postponement of the company’s expansion program at its Stavysche facility, we downgrade the OVO stock to SELL with a target price of PLN 58.74.
