Russian forces sharply increase intensity of ground assaults but fail to expand their gains, with Pokrovsk-Kurakhove in Donetsk region and Kursk region in Russia seeing the heaviest fighting.

WSE-listed Kernel Holding, Ukraine’s largest sunflower oil producer and grain exporter, has published its 1Q25FY (July-September 2024) financial results, reporting sales of $798m (-19% q-o-q, +46% y-o-y), EBITDA of $169m, up from -$2m in 4Q24FY and a minor $19m in 1Q24FY, and net income of $121m, vs. net losses of $36m in 4Q24FY and $31m in 1Q24FY. End-1Q25FY net debt stood at $261m, down 7% q-o-q and 58% y-o-y, yielding a net debt to LTM EBITDA ratio of 0.5x, down from 0.7x as of end-2024FY, and EBITDA coverage ratio of 10.7x, up from 5.5x in 2024FY.

Vodafone Ukraine (VFU) CEO Olga Ustynova has confirmed in an interview with a local media outlet that the company is financially capable of repaying its $400m bond maturing on Feb. 11, 2025, yet remains constrained by the prevailing F/X restrictions. According to Ustynova, the final decision on repaying the bond will be made by the company’s shareholder.

The NBU Board hiked its key rate by 50bp to 13.5% after keeping it flat since mid-June, justifying the decision by the need to maintain F/X market stability and anchor inflation expectations with the final aim of achieving the 5% inflation target. According to the NBU, inflation has been growing faster than expected in the past several months, highlighting the growing role of fundamental pro-inflationary factors and risk of deteriorating inflation expectations.  Commenting on macro risks, the central bank said the recently approved $50bn ERA package backed by proceeds from immobilized Russian sovereign assets had substantially eased the risk of monetary financing of the budget deficit, boding well for the NBU’s ability to maintain F/X market stability. Russian aggression remains the key risk for the economy and inflation dynamics. Other negative risk factors include higher fiscal funding needs, additional tax hikes, further significant damage to energy and port infrastructure from Russian attacks, intensifying outward migration, and more acute labor deficit. Among positive risk factors, the NBU mentioned further progress on EU integration and quicker repairs on damaged energy infrastructure.

According to the Ukrainian Economy Ministry, real GDP increased by an est. 0.9% y-o-y in November, slowing from 1.3% in October and 3.8% in September and bringing the 11M24 growth tally to an est. 4.0% y-o-y (+/-0.5pp), down from 4.2% in 10M24. The Ministry said the stable operation of domestic Black Sea ports, state support programs, solid consumption and defense production were the main economic activity drivers in November.

Metinvest issued an update on its Ukrainian operations, announcing a suspension of production at a coal mine near the Donetsk region village of Pischane, part of the Pokrovske Coal complex, due to heavy fighting and Russian advances in the area. The mine accounted for around half of Pokrovske’s coal extraction.

President Volodymyr Zelensky has said that Ukraine needs to secure 10 to 12 additional PATRIOT air defense systems to reliably protect its civilian infrastructure from Russian attacks and “make the war for [Russian President Vladimir] Putin senseless.” He added, without elaborating, that acquiring this number of PATRIOTs would cost $30bn and the potential purchases could be funded by tapping frozen Russian assets.

Crude steel production in Ukraine totaled 7.0 Mt in 11M24, up 23% y-o-y, with finished and semi-finished steel output rising by 18% y-o-y to 5.7 Mt and hot metal production jumping by 20% to 6.5 Mt. These data imply November crude steel production of 541 kt (-10% m-o-m, -0.8% y-o-y), hot metal output of 542 kt (-13% m-o-m, +0.2% y-o-y), and a finished and semi-finished steel volume of 477 kt (+7.9% m-o-m, -4.4% y-o-y). Daily production averaged 18.0 kt last month (-7.4% m-o-m, -0.8% y-o-y).

LSE-listed MHP, Ukraine’s largest poultry producer, announced that it has submitted a binding offer to acquire UVESA Group, a vertically integrated poultry and pork meat producer in Spain. The potential acquisition is subject to the fulfillment of certain conditions, including securing a minimum acceptance threshold of 50.01%. Other parameters have not been disclosed.

The Ministry of Finance placed UAH 23bn ($554m) of hryvnia-denominated bonds at a primary auction yesterday.

Headline CPI rose by 1.9% m-o-m in November, in line with the October reading, accelerating to 11.2% y-o-y from 9.7% a month earlier. Core inflation, which excludes administratively regulated tariffs and prices of raw foods and energy, increased by 1.2% m-o-m on top of 1.3% in October and rose in y-o-y terms to 9.3% from 8.3%.

The Ukrainian government has approved a resolution defining the terms and conditions of the United States’ $20bn contribution to the $50bn G7 Extraordinary Revenue Acceleration (ERA) package backed by proceeds from immobilized Russian sovereign assets.

Metinvest announced a cash tender offer to acquire up to $70m worth of its EUR 178m 2025 Eurobonds under unmodified Dutch auction rules. The minimum and maximum purchase prices were set at 86% and 92.5% of the nominal amount.

Fitch has affirmed its Long-Term Foreign Currency (LTFC) rating on Ukraine at RD due to the country’s external commercial debt restructuring being incomplete, with the outstanding obligations on which agreement is yet to be reached including a $0.7bn Cargill loan, a $825m state-guaranteed Eurobond issued by Ukrenergo, and $3.2bn of GDP warrants. Fitch said the RD rating will remain in place until it judges the restructuring to have been completed and relations with a significant majority of external commercial creditors normalized. At the same time, Fitch left its rating on the newly issued Ukrainian sovereign Eurobonds at CCC, noting that it can be downgraded in case of increased probability of further restructuring or default.

Key highlights from last week: Russian forces keep up a high tempo of offensives, making gains towards Pokrovsk and Metinvest’s Pokrovske Coal and in nearby Kurakhove sector. Other front lines, inside Ukraine and in Russia’s Kursk region, remain largely unchanged. Donald Trump calls for an immediate ceasefire, saying “this is [Russian President Vladimir Putin’s] time to act.” President Zelensky reiterates openness to talks and need for lasting security guarantees, discloses Ukrainian military casualties.

Ukraine exported 4.9 Mt of grain and oilseeds in November, down 5.2% m-o-m but up 7% y‑o‑y. Grain exports totaled 4.1 Mt, up 2.9% m-o-m and 12% y-o-y, and oilseed exports stood at 0.8 Mt (-32% m-o-m, -10% y-o-y).