According to provisional data from the Finance Ministry, the central budget ran a cash deficit of UAH 162bn in May ($4.1bn), widening from a revised UAH 109bn ($2.8bn) in April.

Interpipe published its 2023 financial results, reporting net sales of $989m (+0.8% y-o-y), EBITDA of $337m (+65%), for an EBITDA margin of 34% (+13pp y-o-y), and net income of $253m (+24%). Pipe segment EBITDA jumped by 71% y-o-y to $184m, rail wheel segment EBITDA rebounded to $33m from -$2.6m in 2022, and steel segment EBITDA rose by 22% to $119m. On a pass-through basis (without attribution to steelmaking segment), pipe EBITDA surged by 58% y-o-y to $267m, wheel EBITDA went up by 2.6x to $60m, and steel EBITDA fell by 22% to $8.6m.

LSE-listed MHP, Ukraine’s largest poultry producer, reported 1Q24 sales of $719m (-1% q-o-q and -4% y-o-y), EBITDA of $127m (-10% q-o-q but +2% y-o-y; incl. IFRS 16 effect) and net income of $16m (-20% q-o-q and -67% y-o-y). Quarterly EBITDA before IFRS 16 stood at $119m, up 3% q-o-q and y-o-y. Export sales totaled $453m or 63% of revenue (vs. 62% in 1Q23). End-1Q24 net debt (before IFRS 16) stood at $1,123m, for a Net Debt to EBITDA ratio of 2.51x (vs. 2.47x at end-2023).

Ukraine’s headline current account (C/A) deficit stood at $1.5bn in April, virtually flat m-o-m, while the financial and capital account (F/A) surplus, including IMF funds, narrowed to $0.1bn from $8.1bn in March.

State rail monopoly Ukrainian Railways (RAILUA) reported freight transportation of 15.5 Mt in May, up 1.8% m-o-m and 34% y-o-y.

The National Bank’s index of business activity expectations, a PMI-type gauge, dropped by 4.3 m-o-m in May, to 48.0 on a 0-100 scale (-2.5 y-o-y).

According to preliminary data released by the NBU, state-owned Ukreximbank booked net profit of UAH 2.5bn ($65m) in 1Q24 (+118% y-o-y), reversing the previous quarter’s net loss of UAH 0.3bn ($9m). Total assets increased by 2.9% q-o-q in UAH terms (+8.3% y-o-y), with net loans up 1.9% q-o-q (-2.3% y-o-y). Customer deposits, in UAH terms, increased by 1.3% q-o-q (+10% y-o-y). NIM, based on net interest-bearing assets and in UAH terms, inched down by 0.2pp q-o-q to 3.5% (+2.3pp y-o-y). Annualized cost of risk stood at a positive 5.1%, reflecting a release of provisions, up from 0.3% in 4Q23 (and 3.1% in 1Q23). The total capital adequacy ratio came in at 4.3% as of end-1Q24 (+0.1pp q-o-q, -4.9pp y-o-y).

State-owned Oschadbank booked net profit of UAH 4.9bn ($127m) in 1Q24 (+91% y-o-y), rebounding from a UAH 8.2bn ($224m) net loss in 4Q23. Total assets in UAH terms increased by 7.6% q-o-q to UAH 372bn (+34% y-o-y), with net loans up 4.6% q-o-q (+15% y-o-y) and securities holdings expanding by 7.4% q-o-q (+40% y-o-y). Customer deposits rose by 7.7% q-o-q in UAH terms, to UAH 322bn (+33% y-o-y). NIM, based on net interest-bearing assets and in UAH terms, dipped by 0.2pp q-o-q to 7.8% in 1Q24 (-0.4pp y-o-y). Annualized cost of risk was positive at 3.0% in 1Q24 (vs. pos. 2.6% in 1Q23), reflecting another release of provisions. The total capital adequacy ratio came in at 15.7% (-0.9pp q-o-q and +1.4pp y-o-y).

Key highlights from last week: Russian territorial advances slowest since mid-April as Kharkiv offensive halted; Western allies reportedly relax their ban on using their weapons to strike targets in Russia Ukraine signs long-term security cooperation agreements with six more countries, secures over EUR 4bn in military aid commitments for 2024 Sweden’s donation of early warning aircraft and Russian attacks at air bases suggest Ukraine will receive first F-16 planes soon Russian conducts new mass attacks on civilian and military infrastructure using close to 200 missiles and drones in three strikes

Russia conducted another mass strike against the Ukrainian energy system on Jun. 1, the sixth such attack since late March, launching 53 missiles and 47 drones, of which Ukrainian air forces intercepted 35 missiles and 46 drones. Ukrainian authorities reported damage to energy infrastructure assets in the Zaporizhya, Dnipropetrovsk, Donetsk, Kirovohrad and Ivano-Frankivsk regions. The latest attack targeted power distribution, power generation and gas infrastructure assets. DTEK Energy said two of its power plants were damaged.

The IMF and Ukrainian authorities reached a staff-level agreement (SLA) on the fourth review under the Fund’s $15.6bn 4-year EFF program, part of a $122bn support package for Ukraine, this decision paving the way for the IMF Board to approve disbursement of the next loan tranche of $2.2bn later this month. The IMF said that Ukraine had complied with all performance criteria and structural benchmarks (albeit with delay) and that “understanding was reached on an updated set of economic policies to sustain macroeconomic stability and advance economic reforms.”

The government increased electricity prices for households to UAH 4.32/kWh (incl. VAT) from UAH 2.64/kWh effective June 1. Residential consumers using electric heating will have 2,000 kWh per month priced at the old price of UAH 2.64/kWh during the heating season but pay the new increased rate for any additional consumption during the heating season and their entire power use during the rest of the year.

The Ukrainian government approved an agreement with the US on $7.9bn of budget support and $1.6bn of other economic aid, being part of a recently approved $61bn military and economic support package. The money will be provided at zero interest and envisages no adjustment for inflation. Ukraine is to return the full amount in 40 years from Sep. 30, 2025, unless the debt is canceled by the US president. The US president may cancel up to 50% of the total amount after Nov. 15, 2024, and the remainder after Jan. 1, 2026. If Ukraine misses the repayment period, the sides will renegotiate the terms. Conditionality attached to the aid will be determined by separate agreements.

The government has lifted its ban on thermal coal exports, allowing up to 1.2 Mt to be exported in 2024.

WSE-listed Astarta Holding, Ukraine’s largest sugar producer, reported 1Q24 net sales of $180m (+3% y-o-y), EBITDA of $31m (-24%), and net income of $17m (-37%). End-1Q24 debt stood at $128m, yielding a Net Debt/EBITDA ratio of 0.9x (vs. 1.1x at end-2023).