Naftogaz reported strong financial results for the second year running, posting 2024 revenues of $7.4bn (+11% y-o-y), EBITDA of $2.9bn (+49%), and net income of $944m (+49%), with an EBITDA margin of 38% (+9.8pp y-o-y) and net margin of 13% (+3.2pp).

Ukraine’s headline current account (C/A) posted a $0.9bn deficit in March, a sharp improvement from the -$2.4bn monthly average in January-February. Meanwhile, the financial and capital account (F/A) returned to a $2.9bn surplus, recovering from a $0.5bn deficit in February. As a result, the overall balance improved to -$2.0bn from -$3.0bn in February, bringing the 1Q25 total to -$1.8bn, compared to a $3.3bn surplus in 1Q24.

Naftogaz reported 2024 sales of $7.4bn (+11% y-o-y), EBITDA of $2.9bn (+49%), and net income of $944m (+49%), booking an EBITDA margin of 38% (+9.8pp y-o-y) and net margin of 13% (+3.2pp). Year-end cash increased by 4% y-o-y to $1.9bn, with most of this amount held with Ukrainian state-owned banks. Total debt fell by 13% y-o-y to $2.6bn following $481m of debt redemptions, while net debt slid by 40% y-o-y to $0.7bn, improving the Debt/EBITDA ratio to 0.9x from 1.5x at end-2023 and Net Debt/EBITDA to 0.2x from 0.6x, respectively.

WSE-listed Ukrainian agricultural producer IMC reported 2024 sales of $211m (+52% y-o-y), a gain from change in fair value of biological assets (IAS 41) of $76m (+5.0x), EBITDA of $86m (+26.8x; incl. IFRS 16), and net income of $55m (vs. net loss of $21m in 2023). Based on these figures, IMC booked 4Q24 sales of $71m (+73% y-o-y), an IAS 41 gain of $14m (vs. -$8m in 4Q23), EBITDA of $15m (vs. -$11m in 4Q23), and net income of $7m (vs. $19m net loss in 4Q23), for EBITDA and net margins of 17.8% (+50.6pp y-o-y) and 8.7% (+66.7pp).

The United States and Ukraine have signed an inter-governmental agreement to establish the US-Ukraine Reconstruction Investment Fund that will develop natural-resource projects in Ukraine. Ukrainian First Deputy PM and Economy Minister Yulia Svyrydenko, who signed the agreement on behalf of the Ukrainian government, announced its key provisions as follows: Full ownership and control remain with Ukraine - the Ukrainian state will determine what and where to extract, and subsoil remains under Ukrainian ownership.

Ukraine’s direct and guaranteed public debt stood at $172bn as of end-March, up 1.6% m-o-m and 3.4% YTD.

The average base load day-ahead (DAHD) electricity price stood at UAH 4,259/MWh (EUR 90/MWh equivalent) in April, down 17% m-o-m but up 37% y-o-y. The average bilateral base load price on the Ukrainian Energy Exchange (UEEX) for March deliveries fell 15% m-o-m but rose 79% y-o-y to UAH 4,783/MWh, remaining 13% above DAHD prices.

The Ministry of Finance placed UAH 46bn ($1.1bn) of hryvnia-denominated bonds at primary auctions in April, up from UAH 30bn in March ($719m), and sold $200m of F/X-denominated bonds (vs. $406m in March). With UAH 40bn ($972m) of UAH bonds and $281m of F/X bonds redeemed ($1.3bn in total), MinFin recorded a net placement of $54m this month, including $135m net raised from UAH debt sales and an $81m net redemption of F/X bonds. The overall rollover rate stood at 104% in April and 81% YTD.

DTEK Renewables has launched a consent solicitation for its EUR 325m 2027 Eurobonds, asking to amend selected covenants and other terms.

As Russia’s war continues to weigh heavily on Ukraine, the country’s economic outlook remains primarily dependent on the course of the war and external financial support rather than global economic conditions.

Russian President Vladimir Putin announced a 72-hour ceasefire starting from midnight on May 7-8 to coincide with Russia’s Victory Day holiday, marking the 80th anniversary of the Soviet Union’s defeat of Nazi Germany in World War II. Reacting to the announcement, President Volodymyr Zelensky called it “another attempt at manipulation … just to provide Putin with silence for his parade” and reaffirmed Ukraine’s support for an earlier US proposal from March to establish a full ceasefire – “immediate, full, and unconditional” – for at least 30 days and use it as a foundation for “real diplomacy.”

Ukrenergo, the state-owned transmission system operator, has agreed on restructuring terms for its outstanding $825m state-guaranteed Eurobond with a group of bondholders representing over 45% of the notes, including the Ad Hoc Committee. The company expects to complete the restructuring by early July 2025. The agreed terms include a cash tender offer and an exchange offer for new Ukrenergo securities without a government guarantee. The cash tender offer is conditional on Ukrenergo securing $430m in financing from an undisclosed development finance institution (DFI). Bondholders will be able to tender their notes via an unmodified reverse Dutch auction with a ceiling price of 65.125% of principal ($825m) plus past due interest (PDI), currently estimated at $215m. If oversubscribed at the cut-off price, the offer will be accepted on a pro-rata basis, with any unaccepted bonds reallocated to the exchange offer.

LSE-listed MHP, Ukraine’s largest poultry producer, reported 2024 sales of $3,046m (+0.8% y-o-y), EBITDA of $632m (+24% y-o-y; incl. IFRS 16), and net income of $144m (+1.4% y-o-y). EBITDA before IFRS 16 stood at $566m, up 27% y-o-y. The results imply 4Q24 sales of $784m (+7.8% y-o-y), EBITDA of $154m (+9.2% y-o-y; incl. IFRS 16), and net income of $3m (-85% y-o-y), with a flat EBITDA margin of 20%.

The Supervisory Board of Naftogaz has appointed Sergii Koretsky as the company’s new CEO.

Key highlights from last week: Russian forces came close to pushing Ukrainian troops from Kursk region, but Ukrainian forces still retain a small presence there as well as in neighboring Belgorod region. In Ukraine, Russian offensives remained concentrated in Donetsk region, but Russian gains slowed despite a sharp increase in assaults following the partial Easter ceasefire. Russia abstained from mass attacks on Ukrainian energy infrastructure after declaring the expiration of an energy ceasefire, but mass Russian attacks on civilian infrastructure continued, causing hundreds of casualties.

US President Donald Trump and Ukrainian President Volodymyr Zelensky both described their meeting in the Vatican on Saturday very positively, with Trump calling it “beautiful” and commending the Ukrainian leader for “doing a good job” as part of US-brokered peace efforts. At the same time, Trump stepped up his criticism of Russian President Vladimir Putin after Russia conducted a mass missile and drone strike on Kyiv and other Ukrainian regions last Thursday. “It makes me think that maybe [Putin] doesn’t want to stop the war … and has to be dealt with differently, through Banking or Secondary Sanctions?” Trump said in a social-media statement.