Ukraine exported 5.1 Mt of grain and oilseeds in October, up 31% m-o-m and 51% y‑o‑y. Grain exports totaled 4.0 Mt, up 33% m-o-m and 59% y-o-y, and oilseed exports stood at 1.2 Mt (+27% m-o-m, +31% y-o-y).

With Donald Trump on the verge of winning the US presidential election, we summarize his pre-election statements related to the war in Ukraine and reassess potential implications for the Eurobond market, building on our earlier analysis.

As of Oct. 31, Ukrainian farmers harvested 66.7 Mt of grain and oilseeds (-0.6% y-o-y) from an area of 18.6 Mha (+7.6% y-o-y), or 91% of the 2024 cropland. The corn harvest totaled 18.3 Mt (+6.8% y-o-y), gathered from 76% of the planted area (vs. 60% a year ago) at an average yield of 5.9 t/ha (-16% y-o-y). The sunflower harvest, 94% finished (in line with last year), totaled 9.6 Mt (-15% y-o-y) or 2.1 t/ha on average (-13% y-o-y). Lastly, farmers harvested 95% of soybean plantings, in line with last year, gathering 5.7 Mt (+23% y-o-y) at an average yield of 2.3 t/ha (-14% y-o-y).

Naftogaz announced that it will capitalize four coupons accrued on its 2028 Eurobond since the company started its restructuring in July 2022, thus increasing the bond’s principal by $83.8m to $583.8m.

Key highlights from last week: Russian forces capture another 200 km2 last week, but gains remain largely limited to Pokrovsk-Kurakhove sector in Donetsk region. Rather than assaulting Pokrovsk, Russia’s immediate goal appears to be to encircle Kurakhove pocket (up to 600 km2), which almost equals Ukraine’s current area of control in Russian Kursk region. Fighting in Kursk region has apparently subsided for now, with no evidence as yet of North Korean troops taking part in combat engagements. Russian drone attacks at new record in October, with over 2,000 UAVs launched and 95% intercepted or jammed.

Ukraine’s headline current account (C/A) balance slid $2.4bn into deficit in September from a $3.2bn surplus in August, returning to its June-July levels, while the financial and capital account (F/A) balance, including IMF funds, ran a $1.1bn deficit after recording surpluses of $1.5bn-1.7bn in July-August. Thus, the total balance came in at negative $3.5bn, reversing August’s $4.5bn surplus and bringing the 9M24 tally to -$2.3bn vs. +$11bn surplus in 9M23.

The National Bank’s survey-based index of business activity, a PMI-type gauge, stood at 49.4 points in October on a 0-100 scale, up 0.7 points m-o-m and flat y-o-y.

The NBU Board left its key rate unchanged at 13.0% p.a., in line with its forward guidance, justifying the decision by higher-than-expected inflation acceleration (September headline CPI at 8.6% y-o-y, above NBU forecast of 7.9%) and the need to maintain the attractiveness of UAH-denominated assets and F/X market stability.

The average baseload day-ahead (DAHD) electricity price stood at UAH 5,249/MWh (EUR 114/MWh) in October, down 2.9% m-o-m and up 40% y-o-y. The average bilateral baseload price on the Ukrainian Energy Exchange (UEEX) for October supplies rose by 2.4% m-o-m to UAH 5,145/MWh (+40% y-o-y), staying 2.0% below the day-ahead market level. November baseload power is currently priced slightly lower at UAH 5,077/MWh (-1.3% m-o-m, +32% y-o-y).

Ukraine’s direct and guaranteed public stood at $156bn as of end-September, up 0.6% m-o-m and 7.1% YTD.

The Helsinki District Court has issued a freezing order on assets worth up to $4.2bn owned by Russia in Finland. The decision was in response to the August 2023 ruling by the Permanent Court of Arbitration in The Hague that ordered Russia to pay Naftogaz $4.2bn plus interest as compensation for the seizure of the company’s assets in Crimea in 2014 and reimbursement of arbitration costs. According to Finnish media, the arrested assets include real estate and other assets worth EUR 35m.

Fitch Ratings has affirmed its Long-Term Foreign-Currency and Local-Currency Issuer Default Ratings on DTEK Energy B.V. at CC. The agency said DTEK had sufficient cash for interest and debt repayments for the next six months, but its cash generation could be jeopardized by a potential military escalation and continued Russian attacks on energy assets in Ukraine. DTEK’s upcoming debt maturities are small and include semi-annual Eurobonds amortizations of $8m ($16m annually), a $8m Sense Bank loan repayable over two years, and $20m of annual Eurobond coupons and other interest payments payable quarterly ($80m p.a.). Assuming a 13% y-o-y drop in DTEK’s 2024 power generation, to 14 TWh, and a 10% increase in power prices, Fitch projected DTEK Energy’s 2024 EBITDA at $530m, expecting similar EBITDA levels in 2025-2026. It also estimated annual free cash flows at $140m in 2024 and $70m in 2025-2026 based on assumed working capital stabilization. Lastly, Fitch modeled CAPEX outlays at $235m in 2024 and $250m in 2025-2026. (Fitch Ratings)

The Ministry of Finance placed UAH 15.6bn ($377m) of hryvnia-denominated bonds and $162m of USD-denominated paper at a primary auction yesterday, in line with the previous week when UAH 16.7bn ($403m) of UAH debt and $200m of F/X paper was sold.

Ukraine’s state power transmission system operator Ukrenergo reported 1H24 revenues of $1.3bn (+20% y-o-y) and a net loss of $248m, up from a loss of $65m in 1H23. EBITDA totaled an est. $196m (+112% y-o-y).

The European Network of Transmission System Operators for Electricity (ENTSO-E) announced that commercial power import limits for Ukraine and Moldova would be increased by 0.4 GW to 2.1 GW effective Dec. 1. The maximum volume of permitted imports will be reviewed monthly starting from next March.

WSE-listed Kernel Holding, Ukraine’s largest sunflower oil producer and grain exporter, has published its 2024FY financial results (July 2023-June 2024), reporting sales of $3,581m (+4% y-o-y), EBITDA of $381m (-30%) and net income of $168m (-44%). End-2024FY net debt stood at $281m (-53% y-o-y), yielding a net debt to EBITDA of 0.7x (vs. 1.1x as of end-2023FY) and EBITDA coverage ratio of 5.5x (vs. 4.4x in 2023FY).