The government approved a resolution yesterday that ordered a temporary suspension of payments on $3.2bn of GDP warrants from May 31, 2025; on state guarantees covering a $825m Eurobond issued by Ukrenergo from Nov. 9, 2024; and on loans provided by Cargill Financial Services International, Inc. (est. EUR 650m) from Sep. 3, 2024. The suspension will last until the end of the underlying debt restructuring process, and it was approved in line with the legislation passed by parliament in July that authorized the government to suspend payments on debt instruments included in the restructuring perimeter.

The Ministry of Finance placed UAH 5.1bn ($124m) of hryvnia-denominated bonds at a primary auction yesterday, up from UAH 3.5bn ($85m) a week earlier.

Key highlights from last week: Ukrainian operation in Russia’s Kursk region, ongoing since Aug. 6, appears to have moved to positional battles, with neither side managing tangible gains since late last week Russian offensive in Donetsk region is not abating, making further gains towards Pokrovsk

Russia conducted another attack on the Ukrainian energy system on Monday, its eighth mass strike specifically targeting energy assets since end-March and reportedly the largest such attack since the start of the war. The strike included 127 missiles and 109 suicide drones, of which the Ukrainian air defense intercepted 102 missiles (including 2 ballistic) and 99 drones. The missiles and drones that came through caused damage, leading to country-wide power supply disruptions. The transmission system operator Ukrenergo reintroduced power rationing for households, while government authorities said the full extent of damage was being assessed.

PJSC VF Ukraine, the borrower under Vodafone Ukraine’s (VFU) $400m 2025 loan participation notes, published its stand-alone results for 2Q24, reporting revenue of $140m (flat q-o-q and +1.9% y-o-y), EBITDA of $79m (-3.3% q-o-q, -3.6% y-o-y) and net income of $28m (+20% q-o-q, -20% y-o-y). End-1H24 net debt stood at $221m, down 24% from the end-2023 level of $291m, and end-1H24 cash and short-term investments totaled $294m, up 16% q-o-q and 32% above $222m at end-2023.

Ukrainian parliament has passed a bill permitting the state power transmission system operator Ukrenergo to use 50% of the proceeds it receives from selling access to cross-border transmission capacities to settle its balancing-market arrears and channel the other 50% to repay its debt to Guaranteed Buyer.

WSE-listed Ukrainian agricultural producer IMC has purchased 150 grain hoppers to support its grain export logistics and plans to procure another 150 railcars by end-2024, with total CAPEX for the project estimated at $12m.

The Ukrainian offensive in Russia’s Kursk region, entering its third week, has predictably slowed in recent days as Russia continues to saturate its defenses by bringing in reinforcements from parts of the front inside Ukraine. According to Ukrainian chief military commander Gen. Oleksandr Syrsky, Ukrainian forces controlled over 1,260 km2 of Russian territory as of Aug. 20, up from 1,000 km2 seized in the first week of the offensive during Aug. 6-13, having advanced up to 35 km inside Russia. As we noted in our previous update on Monday, while Ukrainian forces continue to attempt deeper advances inside Kursk, the Ukrainian military command’s immediate goal appears to be to expand its bridgehead along the Ukrainian border by driving Russian forces out of a large pocket between the Seym river in the north and the border in the south (see circled area on map below). As part of this operation, Ukrainian forces destroyed or damaged three bridges across the Seym in recent days and proceeded to successfully hit Russian pontoon crossings. Taking control of the pocket between the Seym and the border, measuring over 500 km2, would make Ukraine’s Kursk bridgehead much more defensible and also expand the buffer zone around the Ukrainian regional capital of Sumy, located 30 km from the border.

LSE-listed MHP, Ukraine’s largest poultry producer, has finished harvesting winter crops, gathering 285 kt of winter wheat at an average yield of 7.2 t/ha (+9% y-o-y) and 125 kt of winter rapeseed at 3.6 t/ha (-3% y-o-y).

Ukraine will need $38bn of external financial support in 2025, in line with 2024, Prime Minister Denys Shmygal said yesterday. On a related note, Deputy Finance Minister Olha Zykova said that the state budget’s foreign funding needs next year will be $12-15bn higher than the $23bn currently envisaged by the IMF program. The Head of the IMF mission to Ukraine, Gavin Grey, confirmed that 2025 budget spending and funding needs would be higher than projected by the $15.6bn EFF program, as the war would last longer than originally assumed. He also stressed that the financing package for Ukraine should be consistent with a sustainable path and that the role of domestic financing should grow.

The Ministry of Finance placed UAH 3.5bn ($85m) of hryvnia-denominated bonds at a primary auction yesterday, down from UAH 6.9bn ($166m) a week earlier.

The Ukrainian Consumer Confidence Index (CCI), a survey-based gauge calculated by market research firm Info Sapiens, increased by 5.6 points m-o-m in July, to 70 on a 0-200 scale, after falling to a war-time low of 65 in June.

Energy Minister German Galushchenko said Ukraine could restore 3 GW of damaged power generating capacity by end-2024 if sufficient financing was made available.

Ukraine harvested 31.8 Mt of grain and oilseeds as of Aug. 15 (+2% y-o-y) from an area of 7.9 Mha (+5% y-o-y), representing 41% of the total grain and oilseeds cropland. Early crops, including wheat, barley and rapeseed, were reported 98-100% harvested, with wheat production totaling 21.7 Mt at an average yield of 4.47 t/ha (-5.8% y‑o-y) and the barley harvest coming in at 5.5 Mt or 3.92 t/ha on average (-1.5% y-o-y). Also, farmers harvested 3.4 Mt of rapeseed from 98% of the planted area, for a yield of 2.74 t/ha (-4.9% y-o-y).

Key highlights from last week: Ukrainian forces expand their territorial control in Kursk region to est. 600-800 km2 since launching offensive on Aug. 6 Russian forces gain c. 150 km2 in Ukraine over same period, keeping up pressure in Donetsk region despite Kursk losses

WSE-listed Astarta Holding, Ukraine’s largest sugar producer, has finished harvesting winter crops, gathering 260 kt of winter wheat at an average yield of 5.3 t/ha (-16% y-o-y) and 40 kt of winter rapeseed at 3.4 t/ha (-17% y-o-y).