Avangard has reported relatively positive 3Q15 financials: EBITDA of USD 13.2 mln and net income of USD 1.1 mln. Higher shell egg prices, unchanged cost/egg, and VAT subsidy receipts drove the improved financials vs. the 2Q. The company also increased the number of laying hens 13% qoq, which is appositive sign for the 4Q. All of the above trends lend some optimism, but another quarter of similar results would make us even more confident in the company's turnaround. The recent Eurobond restructuring offers breathing space and the company is now in a position to focus on mid-term recovery targets. We see free cash flows near zero through end-2016, but the company's cash-generating capacity is likely to recover only over the mid-term.

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