Power market operator Guaranteed Buyer published data on its settlements with renewable power producers since August, reporting paying 88% of the total due in the first 20 days of November, 67% in October, 47% in September and 56% in August. On a YTD basis, the weighted average settlement rate was reported at 55%.

WSE-listed Ovostar Union, one of the largest shell egg producers in Ukraine, reported 3Q23 net sales of $34m (-17% q-o-q but +2% y-o-y), EBITDA of $10m (-16% q-o-q and -53% y-o-y) and net income of $8m (-27% q-o-q and -59% y-o-y). Exports accounted for 50% of the 9M23 top line, up from 42% in 9M22.

The Ministry of Finance placed UAH 6.7bn ($184m) of hryvnia-denominated bonds at a primary auction yesterday.

Ukraine has increased its maximum capacity to import power from 1.2 GW to 1.7 GW after the state transmission system operator Ukrenergo met all technical criteria required for permanent synchronization with the European Network of Transmission System Operators for Electricity (ENTSO-E).

Ukraine’s direct and guaranteed public debt stood at $136bn as of end-October, up 2.0% m-o-m and up 22% or $25bn YTD, equivalent to an est. 81% of 2023E GDP.

Ukrainian corporates have returned a strong 64% YTD based on the CEMBI Broad Index. Private issuers have stayed current on their Eurobonds, and only selected quasi-sovereigns followed the government to restructure their notes in 2022-23. As a recent rally in selected names erased their remaining upsides, we close all our Long recommendations.

Ukraine harvested 75.7 Mt of grain and oilseed crops as of Nov. 24, up 34% y-o-y. The grain crop totaled 55.0 Mt (+37% y-o-y), gathered from an area of 10.2 Mha, up 11% y-o-y and representing 94% of the total cropland, vs. 82% as of the same date a year ago. With the harvest of early grain crops already finished, corn was gathered from 82% of the planted area as of last Friday, vs. 53% of the cropland a year earlier, with the current yield reported at 7.48 t/ha (+24% y-o-y).

The Ukrainian Economy Ministry estimated real GDP growth at 10.5% y-o-y in October (+/-2.0pp), up slightly from 9.1% y-o-y in September and bringing 10M23 growth to 5.5% y-o-y. The Ministry said that a bumper agricultural harvest continued to support economic growth in October along with a stable situation in the energy sector and revival of seaborne exports. Still, the service sector (including public administration and defense) was the largest contributor to GDP growth.

The front lines were largely unchanged last week despite relentless Russian attacks along the eastern front, especially around the Donetsk city suburb of Avdiyivka. The intensity of battles in the Avdiyivka sector, where Russian forces launched pincer attacks in early October trying to complete an encirclement, suggests that it remains the main focus of Russian offensives. Russian forces made only marginal gains at Avdiyivka last week, but the situation for Ukrainian defenders there remains very difficult as Russian lines west of the town are only 6 km apart, keeping the Ukrainian supply lines under constant fire.

Polish carriers, reportedly joined by local farmers, announced yesterday the blockage of automotive cargo traffic to and from Ukraine via the fourth major crossing point on the Ukrainian-Polish border at Medyka. This adds to the three border-crossing points that have been blocked since Nov. 6. Additionally, a strike at one of the blocked crossing points was said to be extended until Feb. 1.

As of Nov. 21, Ukrainian farmers planted 5.8 Mha of farmland with winter crops for the 2024 harvest, up 5.8% y-o-y and representing 91% of the target area. The winter wheat cropland stood at 4.0 Mha (+7.0% y-o-y and 92% of target), barley plantings at 0.5 Mha (-17% y-o-y and 73% respectively), and the rapeseed area at 1.2 Mha (+16.0% y-o-y and 96%).

Ukraine has received another EUR 1.5bn loan tranche from the EU, the 10th and penultimate disbursement from the bloc’s EUR 18bn one-year MFA+ facility that finance’s Ukraine’s non-military expenses and restoration of critical infrastructure (energy and water systems, roads and bridges, etc.) destroyed by Russia. The loan has a grace period of 10 years, will fully amortize in 35 years, and its interest costs will be covered by the EU.

Naftogaz has secured a EUR 200m loan from the EBRD, subject to the provision of a government guarantee, to finance the buildup of a strategic gas reserve. No other details were disclosed except that the loan is part of the EBRD’s earlier commitment to mobilize EUR 600m for Naftogaz, the power transmission system operator Ukrenergo and hydroelectric power plant operator Ukrhydroenergo to strengthen Ukraine’s energy security.

WSE-listed Kernel Holding, Ukraine’s largest sunflower oil producer and grain exporter, announced that Namsen Limited, directly controlled by Kernel’s founder and Chairman of the Board Andrii Verevskyi, has entered into a put option agreement granting a third party the right to sell 2,032,127 Kernel shares to Namsen Limited at the exercise price of PLN 7.5 per share. The option period will commence on the earlier of Jun. 17, 2024, or the date of official publication initiating a squeeze-out procedure in relation to Kernel Holding.

The Verkhovna Rada passed yesterday a bill on taxation of bank profits, imposing a one-off 50% tax on banks’ 2023 net income and increasing the regular profit tax rate for banks to 25% from 18% starting in 2024. According to Yaroslav Zheleznyak, deputy head of parliament’s finance and tax committee, the bill was agreed with the IMF, the Finance Ministry and the NBU and will be included into a revised memorandum with the IMF expected in mid-December.

The Ministry of Finance placed UAH 8.2bn ($227m) of hryvnia-denominated bonds and $200m of USD-denominated papers at a primary auction yesterday.