Ukraine’s Creative Group Sees Ebitda Growth of 30%, CEO Says

Creative Group OJSC, a Ukrainian maker of oils and margarine, will boost its 2013 earnings before interest, tax, depreciation and amortization as much as 30 percent on improved output, the head of the company said.

“The main growth will be from processing sunflower oil,” Chief Executive Officer Yuriy Davydov said in an interview in his Kiev office yesterday. The company plans to increase sunflower oil output by 37.5 percent to 440,000 tons, he said. Creative Group’s 2012 Ebitda was $143 million, he said.

Ukraine, the world’s largest producer of sunflower seeds and the biggest exporter of sunflower-seed oil, increased the crop’s 2013 planting 43 percent to 2.85 million hectares (over 7 million acres) this year, statistics show. The country may harvest between 8.8 million and 9.4 million tons of sunflower seed this year, compared with 9 million tons in 2012, according to Hamburg-based researcher Oil World.

The share of export revenue for the company, based in Kirovohrad, central Ukraine, will probably be unchanged in 2013 at 68 percent of total revenue or a “little higher,” Davydov said. Last year’s revenue totaled $681 million, he said.

Creative Group, Ukraine’s third-biggest producer of bottled sunflower oil according to its own estimates, is planning to lower the debt-to-Ebitda ratio to under 2.5 this year from 2.54 at the end of 2012, the CEO said. The debt level will be the same or slightly lower, he said. The company seeks to keep its Ebitda margin at 19 percent to 20 percent, he said.

The company is planning to keep investments at about $40 million a year this and next year, compared with $168 million in 2012, Davydov said. The investments are to be used mainly for logistics and increasing the land bank.

Market Watching

“If the situation is favorable on the market” Creative Group will consider the acquisition of a sunflower seed crushing company with annual crushing capacity of 300,000 to 400,000 tons, Davydov said.

The company delayed selling Eurobonds last month because of low market demand. It now has offers from foreign banks including from Russian, and Ukrainian banks to refinance around $350 million of long-term debt with a view to cut interest rates, according to the CEO.

Interest rates offered by the banks for what is going to be bilateral deals are “lower than what bond investors proposed,” Davydov said.

An initial public offering is one of the company’s main goals and between 20 and 25 percent of shares can be sold on one of Europe’s stock exchanges, Davydov said without giving a time frame.

By Kateryna Choursina

May 23 (Bloomberg) --

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