Concorde Capital Ukraine Daily Nov. 17, 2017

Ukraine reform progress significant except anti-corruption, EU says

The international community’s patience is getting exhausted with the lack of practical results of Ukraine’s declared fight against corruption, said on Nov. 16 Johannes Hahn, the EU enlargement commissioner. In particular, he pointed to the few reviews performed of electronic assets and income declarations of government employees. “From what I understand, 1.5 million people declared their property,” he told the First National television network. “But if I’m not mistaken, only about 100 have been reviewed. One hundred out of a million and a half is not a result.” He called upon the Ukrainian government to improve its practical results. “The issue is not only in creating institutions or the presence of needed legislation, but in how it’s fulfilled,” he said.

Ukraine is making significant progress with reforms but needs to accelerate them, the European Commission declared in a recent report, as mentioned by the EU Representative to Ukraine on Nov. 15. Structural reforms have led to positive trends in the social and economic spheres, in spite of domestic and foreign challenges, said the report, as reported by the eurointegration.com.ua news site. These reforms include the pension, health and food production systems. Important legislative initiatives were also undertaken this year in the spheres of electricity, energy efficiency and decentralization, said the report, which reviewed Ukraine’s progress in fulfilling the Ukraine-EU Association Agreement since the last Association Council meeting in December.

Ukraine needs to continue to process of creating an independent Anti-Corruption Court, as well as fulfill the requirements of the next IMF tranche, A. Wes Mitchell, the recently appointed U.S. deputy secretary of state for European and Eurasian Affairs, told the Ukrainian president in a visit to Kyiv on Nov. 15. “It was nice for us to see several important reform laws being approved in Ukraine, but a lot more remains to be done,” he said.

Zenon Zawada: These recent statement continue much of the same story that has characterized the Poroshenko administration, which can be summed up as “too little, too slow.” The Ukrainian president has made an art form out of stretching the West’s patience to the extreme by resisting those reforms and anti-corruption efforts that threaten to restrict his power and authority. The artistry lies in knowing what he can get away with, and in which areas he has no choice but to concede to Western demands. The game will continue to succeed if Poroshenko keeps the Ukrainian public satisfied, enough for re-election in March 2019. However, the current “Rada Maidan” protest, and his weak poll standings ahead of elections, both threaten to ruin his political game.

Ferrexpo raises USD 195 mln in new debt

Ukraine’s largest iron ore pellet exporter Ferrexpo (FXPOLN, FXPO LN) attracted a new three-year credit facility of USD 195 mln with final repayment on 2020, the company announced in a Nov. 17 statement. The credit facility “will be used for general corporate purposes,” the company said. Also, CFO Chris Mawe pointed out that “the facility will significantly reduce the group’s average cost of funding and extend its debt maturity profile.”

Andriy Perederey: Ferrexpo has had strong debt metrics (net debt-to-LTM EBITDA was 0.96x at the end of1H17), which creates the ability to raise new debt facilities. The new credit line is positive for the company’s debt sustainability, as it needs to repay about USD 87 mln in 2H17 and USD 253 mln in 1H18 (including USD 173 mln in Eurobond amortization in April).

We expect the company’s total debt at the end of 2017 will be about USD 682 mln, or a 7.1% yoy decrease. But we retain our neutral view on Ferrexpo bonds, seeing both upside and downside risks to their price being balanced.

Metinvest to purchase 1,800 railcars

Ukraine’s largest steelmaker Metinvest (METINV) reported on Nov. 16 that it plans to purchase 800 railcars by the end of 2017 and 1,000 more railcars in 2018. After these purchases, Metinvest’s fleet of own railcars will reach 4,000 units, the company said, emphasizing that the decision to purchase railcars is related to the worsening deficit of rolling stock in Ukraine.

Dmytro Khoroshun: The railcars’ price will be important to consider. We estimate that a new gondola railcar might sell for about USD 34-38K per unit net of VAT, based on our analysis of Ukrzaliznytsia’s tender expectations and actual purchases in 2017, as well as Kryukiv Railcar’s (KVBZ UK) 2016 financial data. It would be negative if Metinvest acquires railcars at significantly higher prices. We are keeping our neutral view on METINV Eurobonds as we see a high refinancing risk for the next twelve months.

IMC reports 24% drop in 9M17 EBITDA

Farming company IMC (IMC PW) generated USD 81.5 mln in net revenue in 9M17 (a 2% yoy rise), according to its Nov. 17 report. As usual, corn remained the key revenue contributor, accounting for 74% of the company’s total revenue, or USD 60.0 mln.

The company’s cost inflation, which exceeded crop price growth, caused a 9% yoy decrease in gross profit to USD 51.1 bln. Furthermore, inflated SG&A costs (a 52% yoy rise to USD 13.3 mln) caused a 24% yoy decline in EBITDA to USD 42.8 mln. Net income declined 8% yoy to USD 27.6 mln in 9M17.

IMC continued to reduce its leverage, repaying net USD 16.4 mln in 9M17. Its total debt decreased 15% YTD and 8% qoq to USD 70.7 mln as of end-September. Its net debt amounted to USD 63.7 mln (-20% YTD), while its net-debt-to LTM EBITDA ratio was 1.4x as of end-September.

Alexander Paraschiy: As we expected, IMC’s EBITDA is worsening this year, and most likely it will be even weaker next year as the company had a weaker harvest of key crops in the current season. Nevertheless, we remain positive about IMC stock’s mid-term growth, taking into account the company’s strong balance sheet and appealing forward EV/EBITDA multiple of 3.6x.

Investors found bargains in Ukrainian equities on Thursday, Nov. 16. The WIG Ukraine Index of Warsaw-traded stocks climbed 1.9%, led by sunflower oil producer Kernel (KER PW, +4.8%). Dairy producer Milkiland (MLK PW) surged 11.3%. KSG Agro (KSG PW) advanced 4.5%, or 22.1% in two sessions. In London, iron ore miner Ferrexpo (FXPO LN) improved 1.3%, snapping a three-session loss streak. Natural gas E&P Regal Petroleum (RPT LN) plunged 20.7%, or 22.0% in two sessions. The Ukrainian Exchange (UX) Index of Kyiv-traded stocks increased 0.6%.

Ukrainian nationalists – members of the Karpatska Sich organisation – held an action under the Hungarian Consulate in Uzhgorod to prove that the right movement of Zakarpattia are not chauvinists, but rather seek to find points of contact and understanding with neighboring nations, including Hungarians.

In such a tense time for Europe and Ukraine, we can not tolerate manifestations of chauvinism among the European and Slavic nations. Liberals and capitalists keep sowing enmity between by using of provocative historical and cultural conflicts while the European space keep on being filled with migrants and degenerate ideas.

https://ukrainiancrusade.blogspot.com/2017/11/no-to-chauvinism-yes-to-national.html

You have to compare #WilfredLaurierUniversity to this poor proletariat answering for his listening to Rock Music in Soviet times.

My Ukrainian relatives who knew communism would get scolded before a commission if caught blessing Easter baskets. I imagine it resembled this at Wilfrid Laurier University: #WilfredLaurierUniversity

https://globalnews.ca/video/3867811/extended-excerpts-from-secretly-recorded-meeting-between-wilfrid-laurier-university-grad-student-and-faculty

Listen to the audio. She’s in tears. “I don’t even support Jordan Peterson.” . . . . “someone like Hitler or Milo.”

Applebaum, the media-anointed expert on Holodomor, says Trump is “neo-Bolshevik”

Donald Trump, Viktor Orban, Nigel Farage, Marine Le Pen and Jaroslaw Kaczynski: although they are often described as “far-right” or “alt-right,” these neo-Bolsheviks have little to do with the right that has been part of Western politics since World War II, and they have no connection to existing conservative parties. In continental Europe, they scorn Christian Democracy, which had its political base in the church and sought to bring morality back to politics after the nightmare of the Second World War. Nor do they have anything to do with Anglo-Saxon conservatism, which promoted free markets, free speech and a Burkean small-c conservatism: skepticism of “progress,” suspicion of radicalism in all its forms, and a belief in the importance of conserving institutions and values. Whether German or Dutch Christian Democrats, British Tories, American Republicans, East European ex-dissidents or French Gaullists, post-war Western conservatives have all been dedicated to representative democracy, religious tolerance, economic integration and the Western alliance.

By contrast, the neo-Bolsheviks of the new right or alt-right do not want to conserve or to preserve what exists. They are not Burkeans but radicals who want to overthrow existing institutions. Instead of the false and misleading vision of the future offered by Lenin and Trotsky, they offer a false and misleading vision of the past. They conjure up worlds made up of ethnically or racially pure nations, old-fashioned factories, traditional male-female hierarchies and impenetrable borders. Their enemies are homosexuals, racial and religious minorities, advocates of human rights, the media, and the courts. They are often not real Christians but rather cynics who use “Christianity” as a tribal identifier, a way of distinguishing themselves from their enemies: they are “Christians” fighting against “Muslims” — or against “liberals” if there are no “Muslims” available.

https://www.washingtonpost.com/opinions/global-opinions/bolshevism-then-and-now/2017/11/06/830aecaa-bf41-11e7-959c-fe2b598d8c00_story.html

Massive blow to self-governing in Ukraine:
the parliament cancels transparent competition for heads of regional state administrations (incl governors) & hands the appointment back to the President.
A step away from much-needed decentralization, back to political corruption

https://twitter.com/verkhovna_rada/status/928581083028967424

(News and analysis from, Andrii)

Polish media reported yesterday.

Officials keep silence but Polish minister of foreign affairs Blaschykowski made a skandal this week while visiting Lviv. He refused to enter museum Victims of Occupational Regimes: «Tyiurma na Lontskoho» (Prison at Lontskoho Street). There is a sign (plaque) on front wall where regime of 1918 – 1939 Polish state is among other occupational regimes.

Viatrovych supports that point of view and he also had suspended creation of new Polish memorials in Ukraine which are not agreed with Natioanl Unstitute of Remembrance

So, some Polish official call it “anti-Polish views”. Polish president Duda has asked Poroshenko not to appoint any officials who have anti-Polish views.

Viatrovych supports UPA, he also doesn’t agree with Polish narrative about Volyn massacres.

So, minister Blaschykowski says that Poland will make a list of Ukrainian persons non grata. Everyone who has views similar to Viatrovych’es can be there.

Analysis:

I think that all this is inspired by Polish internal politics. Blaschykowski and president Duda belong to Prawo i Spravedliwosc party (conservatives, nationalists). They try to keep high ratings and electorial support by manipulation with historical traumas.
Some Polish media even make headlines “Cold war with Ukraine”.

Our relationships with Hungary are getting worse too and reasons are the same there.
And Russia plays on that field too.

I would also say that Poland feels strong right now. And they try to transform into regional leader who tells neighbors what is right and what is wrong.

Ukrainian language analysis here: http://www.bbc.com/ukrainian/features-41934591

All the Trump hating cucks in the Ukrainian diaspora should read this White House statement!

https://www.whitehouse.gov/the-press-office/2017/11/07/national-day-victims-communism

Today, the National Day for the Victims of Communism, marks 100 years since the Bolshevik Revolution took place in Russia. The Bolshevik Revolution gave rise to the Soviet Union and its dark decades of oppressive communism, a political philosophy incompatible with liberty, prosperity, and the dignity of human life.

Over the past century, communist totalitarian regimes around the world have killed more than 100 million people and subjected countless more to exploitation, violence, and untold devastation. These movements, under the false pretense of liberation, systematically robbed innocent people of their God-given rights of free worship, freedom of association, and countless other rights we hold sacrosanct. Citizens yearning for freedom were subjugated by the state through the use of coercion, violence, and fear.

Today, we remember those who have died and all who continue to suffer under communism. In their memory and in honor of the indomitable spirit of those who have fought courageously to spread freedom and opportunity around the world, our Nation reaffirms its steadfast resolve to shine the light of liberty for all who yearn for a brighter, freer future.

I watched this a second time.

Paglia, for all her insight, seems like discarded revolutionary, bitter that the promises of the revolution never materialized, yet too idealistic to see the promises as momentary Machiavellian manipulations toward a larger goal.

More specifically, she was promised that universalism, individualism and free speech were guiding lights for humanity.

She does *not* believe, as a growing number of us do, that these once-leftists virtues were Machiavellian steps toward the destruction of Western civilization. They were merely prying open the door to infiltrate and poison the institutions of the west.

I’m old enough to remember when burning the flag and desecrating the symbols of Christendom were hailed as heroic expressions of free speech. In school, debates were organized with exactly this framing.

But as soon as the leftists seized control, free speech, free expression, individualism, went out the window, in the name of class struggle, tolerance (for “oppressed groups only”), anti-hate speech.

Viewed in a time frame that spans more than a generation, this isn’t a case of lost direction, but exactly the deliberate dismantling of the West about which those despicable, ungrateful Cultural Marxists wrote.