Crude steel production in Ukraine totaled 3.1 Mt in 5M24, up 31% y-o-y, with finished and semi-finished steel output rising by 30% y-o-y to 2.6 Mt and hot metal production up 21% to 2.8 Mt.

WSE-listed Ovostar Union, one of the largest shell egg producers in Ukraine, reported 2023 net sales of $163m (+20% y-o-y), EBITDA of $50m (+4.5x y-o-y) and net income of $45m (+5.4x y-o-y). Exports generated 46% of the 2023 top line, up from 40% in 2022.

President Volodymyr Zelensky, speaking at the Ukraine Recovery Conference in Berlin yesterday, said Ukraine planned to install 1 GW of decentralized gas-fired power generation capacity in 2024 and another 4 GW in the next several years.

The Ministry of Finance placed UAH 11.0bn ($272m) of hryvnia-denominated bonds at a primary auction yesterday, almost matching last week’s sale of UAH 11bn.

Ukraine has signed a first set of agreements worth EUR 1.4bn aimed at supporting the private sector and local governments, being part of the EUR 7bn Ukraine Investment Framework (Pillar II) of the EU’s EUR 50bn four-year Ukraine Facility. The financing includes EUR 1.1bn of guarantees and EUR 0.3bn of grants or similar instruments for IFIs (EBRD, IFC, EIB and others) and is intended to provide support to the energy sector and SMEs and to finance reconstruction. The deals were signed during the Ukraine Recovery Conference in Berlin.

DTEK CEO Maksym Timchenko said the company has been left with only 460 MW of operational power generating capacity, out of the 5,000 MW it had before renewed Russian attacks on the Ukrainian power infrastructure that began in March. He said that the quickest way to deal with energy shortages was to expand import capacity to 2.2-2.5 GW from current 1.7 GW.

Ukraine’s headline CPI rose by 0.7% m-o-m in May, accelerating from 0.2% in April and marginally increasing its y-o-y growth pace to 3.3% from 3.2% in April. Core inflation, an indicator adjusted for administratively regulated tariffs and prices of raw foods and energy, picked up by 0.3% m-o-m, slowing from 0.7% m-o-m in April and leaving the y-o-y tally at 4.4%, unchanged from a month earlier.

Ukraine exported 5.8 Mt of grain and oilseeds in May, the 11th month of the marketing year (MY) 2023/24 (July 2023 – June 2024), down 13% m-o-m but up 50% y‑o‑y. Grain exports totaled 5.5 Mt, down 12% m-o-m but up 57% y-o-y, oilseed exports stood at 230 kt (-28% m-o-m and y-o-y), and sunflower oil exports came in at 718 kt (+15% m-o-m, +58% y-o-y).

According to a May 16-22 nationwide poll by the Kyiv International Institute for Sociology, 59% of respondents said they trusted President Volodymyr Zelensky, down from 77% last December and a record 90% in May 2022, less than three months after the Russian invasion, but still much higher than 37% in February 2022 on the eve of the war. The share of those distrusting the president rose to 36% in May 2024 from 22% last December and 7% in May 2022.

Fitch Ratings has affirmed its long-term foreign currency issuer rating on Ukraine at CC. The rating agency said Ukrainian authorities were preparing a “single comprehensive debt restructuring proposal” but did not rule out another standstill agreement if no restructuring deal was reached. Fitch said that it could upgrade Ukraine if security risks significantly decreased, reducing the likelihood of a commercial debt restructuring. Fitch’s underlying assumptions include the war continuing throughout 2024 and possibly into 2025 at the current level of intensity, with Ukraine likely to avoid large territorial losses thanks to Western military support, new mobilization legislation, and strong domestic resolve. Still, a protracted war will weigh on public finances, with Fitch expecting the budget deficit to narrow only marginally this year, to 17.1% of GDP from 19.5% in 2023, pushing public debt to 92.5% of GDP, up from 84.4% in 2023 and well above a median of 70% for B/C/D-rated sovereigns. Fitch projects 2024 real GDP growth to slow to 3.2% y-o-y, down from 5.3% in 2023 and 0.6pp below its previous forecast as the impact of recent Russian attacks on energy infrastructure and new mobilization legislation are expected to offset growth in real wages and recovery in exports due to improved reliability of trade routes. Fitch sees inflation average 6.4% y-o-y in 2024, up from 3.2% in April due to base effects and utility tariff growth.

The Ukrainian Finance Ministry is conducting restructuring negotiations with Eurobond holders, including on a partial write-off of the debt, with the talks expected to become public soon, Finance Minister Serhiy Marchenko said in the Verkhovna Rada on Friday. In the meantime, Bloomberg reported that closed talks with a creditor committee began last week.

Russia’s weekly territorial gain smallest since early April

NBU gross foreign reserves declined by 7.9% ($3.4bn) m-o-m and 3.6% YTD in May, to $39.0bn. This tally is equivalent to 5.1 months of prospective goods and services imports, according to central bank estimates. Meanwhile, the official exchange rate of the hryvnia to the US dollar weakened by 2.1% m-o-m to UAH 40.5:USD following a 1.1% drop in April, bringing the YTD rate of depreciation to -6.2%.

An AGM of WSE-listed Astarta Holding approved an annual dividend payout of EUR 12.5m or EUR 0.50 per share based on last year’s net income of EUR 61.9m. The AGM authorized the Board of Directors to set the record and dividend payment dates.

DTEK Oil & Gas (DOG) reported 2023 net sales of $753m (-32% y-o-y), EBITDA of $383m (-55%) and net income of $161m (-55%), for an EBITDA margin of 51% (-26pp y-o-y). Net operating cash flow stood at $19m (-54% y-o-y), reflecting a $292m working capital charge. Net investment cash flow totaled $27m (-6.3% y-o-y), yet CAPEX fell by 25% y-o-y to $43m. Net financing cash outflow shrank by 36% y-o-y to $14m as DOG had its 2H23 bond coupon settled by the parent company under an agency agreement.

The average base load day-ahead (DAHD) electricity price grew by 27% m-o-m to UAH 3,941/MWh in May, up 39% y-o-y. Power imports doubled m-o-m in May, to 447 GWh, or 0.6 GW on average.