President Volodymyr Zelensky announced yesterday imminent personnel changes in the government and his office intended to intensify Ukraine’s integration with the EU and NATO, accelerate investments in the domestic defense industry and improve interaction between central authorities and local communities ahead of winter. 

An IMF mission has started discussions with Ukrainian authorities on the fifth review of the Fund’s $15.6bn EFF program, Prime Minister Denys Shmygal announced after his online call with Alfred Kammer, director of the IMF’s European Department.

The Ministry of Finance placed UAH 11.7bn ($285m) of hryvnia-denominated bonds and $200m of F/X-denominated debt at a primary auction yesterday.

The Supervisory Board of Ukrenergo voted to oust company CEO Volodymyr Kudrytsky effective Sep. 4.

The average baseload day-ahead (DAHD) electricity price fell by 1.2% m-o-m to UAH 5,498/MWh (EUR 121/MWh) in August, up 37% y-o-y. The average bilateral base-load price for August supplies on the Ukrainian Energy Exchange (UEEX) dropped by 5.7% m-o-m to UAH 5,050/MWh (+43% y-o-y), or 8% below the day-ahead market price. September baseload electricity supplies are currently priced slightly lower at UAH 5,022/MWh (-0.6% m-o-m and +30% y-o-y).

WSE-listed Ukrainian agricultural producer IMC reported 1H24 sales of $108m (+51% y-o-y), a gain from change in fair value of biological assets (IAS 41) of $28m (+19%), EBITDA of $38m (+121%; incl. IFRS 16), and net income of $22m (+3.4x). Based on these figures, IMC booked 2Q24 sales of $49m (+64% y-o-y), an IAS 41 gain of $27m (+25%), EBITDA of $33m (+112%), and net income of $25m (+144%), for EBITDA and net margins of 67.7% (+15.4pp y-o-y) and 51.6% (+16.9pp).

Key highlights from last week: Russian offensive in Donetsk region towards Pokrovsk slowed temporarily as Russian command focused on securing flanks Ukrainian offensive in Russia’s Kursk region also slowed last week amid reported sporadic Russian counterattacks Russia conducts new aerial attacks against civilians, targeting Kharkiv with glide bombs and Kyiv with ballistic and cruise missiles

Ukraine’s headline current account (C/A) deficit stood at $2.2bn in July, flat m-o-m, while the financial and capital account (F/A) balance, including IMF funds, recorded a $1.5bn surplus, up from $1.0bn in June.

WSE-listed Astarta Holding, Ukraine’s largest sugar producer, reported 2Q24 net sales of $167m (+24% y-o-y), EBITDA of $62m (-4.6%) and net income of $42m (-0.8%). End-1H24 net debt stood at $103m, yielding a Net Debt/LTM EBITDA ratio of 0.8x (vs. 0.9x at end-1Q24 and 1.1x at end-2023). Factoring out $132m of lease liabilities, the company was $29m net cash positive as of end-1H24.

Ukraine’s direct and guaranteed public totaled $155bn as of end-July, up 2.1% or $3.2bn m-o-m and up 6.9% YTD.

Vodafone Ukraine (VFU), Ukraine’s second largest mobile operator, reported 1H24 revenues of $300m (+5% y-o-y), EBITDA of $164m (+1% y-o-y), and net income of $50m (-19% y-o-y). The EBITDA margin dropped by 2.3pp y-o-y to 54.7% and net margin shrank by 5.1pp y-o-y to 16.7%. VFU reported 2Q24 ARPU of UAH 115.8, up 3.2% q-o-q and 6.8% y-o-y in UAH terms ($2.9). The number of subscribers increased by 0.6% q-o-q to 15.9 million (+4.6% y-o-y), while quarterly CAPEX surged by 57% q-o-q to $33m (+22% y-o-y).

Naftogaz has started importing natural gas from the EU to build a reserve for the 2024/2025 heating season to be used to supply industrial consumers in case of emergency. The company is financing the purchases with a EUR 200m EBRD loan.

The Ukrainian Finance Ministry announced yesterday that more than 97% of investors holding $20.5bn of the country’s sovereign and state-guaranteed Eurobonds supported their proposed restructuring, with each of the 14 bond series soliciting more than 95% of votes (vs. 66.6% and 50% required, respectively). Ukraine expects to issue new notes on Aug. 30.

The largest local subsidiaries of DTEK Energy have published their 1H24 financial results under Ukrainian Accounting Standards (UAS), booking combined EBITDA of $220m, up from $105m in 1H23.

Fitch Ratings upgraded its long-term issuer rating on state-owned Ukrainian Railways (RAILUA) to CC from C as the company “was able to withstand the sovereign default” and its rating is no longer affected by this risk.

President Volodymyr Zelensky, speaking at a press conference yesterday, said he planned to travel to the US in September to present a plan to “force Russia to end the war” to President Joe Biden. Zelensky said the Ukrainian military’s ongoing operation in the Kursk region of Russia was part of this plan, together with diplomatic pressure on Russia and unspecified “economic” steps.