Gradus sales surged in H1 2019

Poultry producer Gradus’ (GR6 BU) consolidated bottom line surged 21.4% y/y as hatching eggs sales surged in H1’19, according to consolidated interim financials published by the Company.

Hatching eggs sales – main driver of growth

During the first six months of the year, Gradus delivered BGN 86.5m in sales revenue, up 34.3% y/y, the growth being mainly driven by 31.1% y/y increase in hatching eggs segment sales, 2.4x higher y/y grain sales. Sales of meat and meat products marked a slight improvement of 2.7% y/y to BGN 34.1m. In terms of markets, the Group doubled its exports to third countries (BGN 33.9m in H1’19) as grain sales there almost tripled and sales of hatching eggs added 40% y/y.

Local sales grew by 15% y/y to BGN 41.8m thanks to surge in demand for hatching eggs.

European sales, however, dropped 3% y/y to BGN 10.8m due to lower sales of 1-dayold chickens in the region. Still, hatching eggs sales in Europe advanced, almost tripling in H1’19.

Net profit up 21%

Operating costs added 12.7% y/y to BGN 68.6m, driven by costs of materials advancing 11.8% y/y to BGN 40.6m and impairment of biological assets surging 41.3% y/y to BGN 6.2m due to Gradus expanding its parent flocks to meet increasing demand for hatching eggs. Thus, operating profit reached BGN 17.7m, up 19.4% y/y, while net profit was boosted by 21.4% y/y to BGN 15.7m.

Approx. 6% dividend yield from 2018 profit

Back in June, Gradus’ shareholders approved gross DPS of BGN 0.10 for FY2018, DIVY 5.56%, the Company announced in a filing to the Bulgarian Stock Exchange (BSE). The Company will distribute BGN 24.4m from its FY2018 net profit (91.2% payout ratio), which entails gross BGN 0.10 per share. The latter yields 5.56% at current quotes.

In addition, Gradus disclosed that one of the two majority shareholders, Ivan Angelov, who has a 41% stake in the Company, donated 49.6 million shares (or 20.36% of all outstanding shares) to his son Angel Angelov.