Egg processing growth drives profit at Ukraine agri-giant

Ukranian egg-producing giant Avangardco has released interim results for the first nine months of this year, revealing profits up on the back of expanded egg processing.

The statement puts revenue up 4.7% year-on-year, resulting in a 3.2% jump in net profit to £99.17m for the period up to September.

It says the growth was down to a more stable cost of production, and increased revenue largely coming from stronger dry egg sales in a more buoyant market – combined with a bigger flock of hens and improved processing facilities.

Apart from the domestic market, sales were to the Middle East, Africa and former Soviet states in the region. Ukraine has recently received approval to export egg to Europe, and could begin shipping to the EU early next year. Poultrymeat exports have already begun.

It is looking increasingly likely that Ukraine will begin these exports without the benefit of a free-trade agreement that was due to be signed recently. This means high tarifs will have to be paid for access to the EU markets.

But an independent analysis by Wageningen University found processed egg can compete with EU product even when transport and taxes are taken into acocount.

Avangadco’s laying flock has grown more than 10% to 24.6 million birds this year, and the firm puts its average sale price at just 5p an egg – no change from 2012. But processed shell egg has increased about 9p to £4.66/kg.

In the nine months to September, processed egg capacity was up 58.5%, leading to the production of dry egg growing by 47.4%, amounting to 15,500t this year.

Irina Marchenko, Avangadco chief executive said: “These results demonstrate the success of our chosen strategy. We have further increased production of dry egg products, and as a result, the share of this segment in the total revenue has grown.”

The report says it expects to continue placing birds – the ambition is to grow its flock to 30 million birds – at two new poultry complexes, Avis and Chornobaivske. It also plans to continue working towards increasing egg processing capacity to 10m shell eggs a day.