Ukrainian companies and companies with significant Ukrainian exposure in which you can invest

Ukrainian companies and companies with significant Ukrainian exposure in which you can invest

Ukrainian exposure can be obtained not only with direct investments in Ukrainian assets but also through different Ukrainie-exposed stocks and Eurobonds / military bonds.

Astarta Holding N.V (ASTH, WSE)

One of the largest agro-industrial holdings in Ukraine:

• 220 kha under management; 
• sugar production: №1 producer in Ukraine with 250 – 500 thousand tons of sugar production per annum; 
• cattle farming: №1 producer of industrialized milk in Ukraine with more than 100 thousand tons of milk production per annum and 25.5 thousand heads of cattle; 
• soybean crushing: №2 in soybean processing in Ukraine with a crushing capacity of 230 thousand tons;
• bioenergy: designed daily capacity of 150 thousand m2 of biogas;

At the beginning of  full-scale invasion, Astarta shares lost almost 70% of their value compared to the beginning of 2022. Now, in the beggining of February 2024, stocks  are almost at the same level, as before February 2022 (growth since the beginning of 2023 more than 47%) 

9 month performance in 2023 shown mixed results: Revenue increased from EUR 341 to 392 mln (+15%) EBITDA declined by (-11%) from EUR 130 to 117 mln, which can be explained with better situation on grain export market due to launch of alternative sea route by Ukraine and higher prices on key feed components.

The company actively helps the armed forces of Ukraine and implements social projects.

Ovostar Union N.V. (OVO, WSE)

One of the largest egg producers in Europe:

• Near 7 million laying hens; 
• Ovostar Union supplies 55 countries with fresh eggs; 40% of total sales are exports;
• Manufacturing eggs in various forms: liquid, in-shell, dry;
• Revenue in 2022 was USD 135.6 million.

From the beginning of 2022 to its lowest point, the share price lost up to 45% of its original value. And from the beginning of 2023 to February 2024 share price increased by (+55%).

Revenue for the 9M period of 2023 increased from USD 90 up to 123 mln (+36%) compared to 2022, and EBITDA inc. Gross profit of the same period increased from EUR 15.5 up to 42 mln (+170%)

MHP (MHPCq, LSE)

MHP is the largest integrated Ukrainian producer and exporter of poultry and crops, as well as other meat and sausage products and ready-to-eat meat products.

The company specializes in the production of poultry and, in particular, the cultivation of cereals: 

• The leading producer of poultry in Europe with one of the strongest food brands in Ukraine, producing almost 670 thousand tons in 2022; 
• One of the largest grain producers and oilseeds processors in Ukraine with significant growth potential (340 ths ha of arable land in 2022 under management);
• At the beginning of the full-scale invasion, the MHP shares lost about 50% of their value compared to the beginning of 2022 and as of February 2024 remain on the same level (slight growth of 10% since the beginning of 2023).

Poultry meat production increased by (+6%) in 9M 2023, exports increased by (+21%). 

Revenue for the 9M of 2023 grown from USD 1,876 to 2,294 mln (+22%) compared to 9M 2022, EBITDA increased by (+21%) - USD 367 to 304 mln.

Mlk Foods Public Company Ltd / Milkiland (MLK, WSE )

MLK Foods is an international dairy producer with core operations in the CIS and EU:

• The Group’s production assets are located in Ukraine. The total annual milk processing capacity exceeds 500 thousand tons; 
• Controlled through the Group’s subsidiary Milkiland Ukraine and includes milk processing 10 diary processing plants, dairy farming, and an extensive milk collection system throughout Ukraine.

Stock prices have fallen 67% from the end of 2021 to the lowest point in 2022 year and additionally lost 30% from the beginning of the 2023 till February 2024, as the Company used to have financial issues before full-scale invasion and war only increased the pressure.

IMC SA (IMC, WSE)

IMC – is among top 10 Ukrainian agriculture companies operating 120 thousand hectares of arable land in key farming regions of Ukraine (Poltava, Chernihiv, Sumy).

Revenue increased from USD 61.8 to 98.7 mln (+60%) in 9M 2023 compared to the same period of 2022 year. EBITDA decreased from USD 36.8 to 13.8 mln (-62%), due to decrease of crop prices in 9M 2023.

EPAM Systems Inc (EPAM, NYSE)

EPAM is IT company named a Forbes global 2000 company in 2011, works in over than 50 countries:

• 55 600 employees worldwide, largest number of EPAM employees is in Ukraine – 11 300; 
• EPAM is part of the S&P 500 index since 2021.  

In 2022, EPAM's revenue reached USD 4,824 million, marking a 28% increase from USD 3,758 million in 2021. Net income also saw growth, with a rise of over 13% in 2022 to USD 481.7 million, up from USD 419.4 million in the previous year.

Military Bonds

Ukraine has issued a series of war bonds to raise financing and support the army. These bonds can be purchased by Ukrainian legal entities and individuals, as well as foreign investors who want to support Ukraine. The bonds can be nominated and purchased in UAH, USD, or EUR. The most recent auction held on January 30, and issued bonds equivalent to UAH 1.6 BLN.

The war bonds offer up to an 18.5% yield, which surpasses the US Treasury bill, which offers max yield of 5.35%.

Ukrainian Eurobond

Ukrainian sovereign Eurobonds have been under significant pressure since the onset of the war. Approximately 50% of the Ukrainian budget (specifically its social component, excluding the military) is supported by international donors. Given this, restructuring of at least the upcoming issues seems plausible. As of February 2024, the YTM for the upcoming Ukraine 24 was a staggering 396%. Longer-duration bonds exhibit lower YTM but are still trading between 23-31 cents per USD/EUR. 

There's also a unique instrument – the GDP-linked Warrants. In 2015, Ukraine issued GDP warrants worth $3.6 billion to make its restructuring of $15 billion of debt more appealing. This restructuring required investors to write off 20% of the original value of their assets. However, these warrants provide a potential benefit linked to GDP growth between 2021 and 2040. If the real, inflation-adjusted GDP growth surpasses 3%, Ukraine commits to paying warrant holders an amount equivalent to 15% of the economic output exceeding this threshold. This percentage escalates to 40% if the growth surpasses 4%.

Eurobonds from the corporate and banking sectors have demonstrated better resilience compared to the sovereign ones, attributed mainly to a healthier financial situation. This is particularly true for the banking sector, where liquidity has reached an all-time high, thanks to successful reforms implemented between 2015 and 2016. Some entities, like MHP, plan to repurchase a portion of their own bonds, viewing it as a strategic investment given the prevailing circumstances.

Canada Ukraine Sovereignty Bond

If you want to support Ukraine with your investment, then Ukraine Sovereignty Bond can be a stable option. These are bonds, issued by Canada for five years for CAD 500 million. The bonds are issued in Canadian dollars and have an interest rate of 3.245%. According to the terms, the Canadian government will transfer the funds collected from the sale of bonds to Ukraine through the IMF Administered Account for Ukraine.