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Market Comment
PFTS lost more ground yesterday, dropping another -5.48%. Reported turnover remained a healthy USD 15 mln. Today we expect the market to bounce a bit since fundamentals and valuations are beginning to look attractive. We expect bottom fishers to start returning the market in the run-up to the end of the month. As of 10:45 Kyiv time today, 0% of shares were up and 100% of shares were down.
Oil & Gas
JKX Oil & Gas announces 1H08 results. JKX Oil & Gas (JKX LN: N/R) today reported its 1H08 financial and production results. Sales grew 38% yoy to USD 116.8 mln; EBITDA rose 55.1% yoy to USD 96.3 mln and net income was up 63.9% yoy to USD 61.8 mln. JKX’s total production of 2,113 Mboe was down 10% yoy due to a natural decline in oil production, and current capacity limitations on gas processing facilities in the group’s Ukrainian fields. JKX said its robust profit and cash flow in the period primarily resulted from strong international oil prices and Ukrainian gas prices, which compensated for the group’s reduced oil and gas production in the period.
Cadogan’s bottom line declines twofold to USD 14 mln in 1H08. Today, Cadogan Petroleum (CAD LN: N/R) posted a net loss of GBP 7.63 mln (USD 14 mln) in 1H08, vs. a net loss of GBP 3.8 mln (USD 6.8 mln) a year earlier, according to Bloomberg News.
Food
Kernel’s sales soar 89% yoy, EBITDA 172% yoy in 1H08. Kernel Group (KER PW: N/R) today released its first half 2008 financial results: net revenues of USD 663.1 mln (+89% yoy); EBITDA of USD 126.0 mln (+172% yoy) and net income of USD 80.8 mln (+334% yoy).
Real Estate
TMM’s mixed-use project in Kyiv region gets government approval. Yesterday, TMM Real Estate Development (TR61 GR: BUY) announced that on August 18 construction of a 72.3 ths m2 residential & office complex in Obukhiv (Kyiv region) was approved by the State Examination Committee. According to the company, it plans to start building in 4Q08, with completion planned for the end of 2012. The project’s value was put at USD 31.6 mln by Colliers International as of December 31, 2007. Alexander Romanov: We estimate the total cost of the project at USD 38.8 mln. The news is neutral for the stock as project development is going in line with the company’s previously announced schedule.
XXI Century starts building new retail center in Kyiv. XXI Century Investments (XXIC LN: U/R) said yesterday began construction of a new 54.2 ths m2 Kvadrat retail center on Myloslavska Street in Kyiv. The value of the project according to JLL’s appraisal was USD 120.7 mln as of December 31, 2007. Alexander Romanov: We estimate the total cost to construct the project at USD 49 mln. We think financing is secured as the company has already attracted USD 85 mln in debt since the beginning of the year.
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