News Column

Ukrproduct Group Says Hryvna Devaluation Hits Profitability

August 1, 2014

Sam Unsted

LONDON (Alliance News) - Ukrproduct Group Ltd said Friday that the unstable political and economic situation in Ukraine had created a challenging business environment and said devaluation of the Ukrainian hryvna would make it unprofitable in the first-half.

In a trading update, the Ukrainian brand dairy products producer and distributor, said it expects to a see a "sizeable" rise in earnings before interest, taxation, depreciation and amortisation and operating profit in the first-half, but said the devaluation of the Ukrainian currency would make it unprofitable over the period.

The firm said its Branded Dairy Products business saw sales drop due to the market conditions and price rises initiated earlier in the year. But it said is expects profits from the unit to increase on the back of an improvement in profit margins driven by raw milk availability and better pricing.

In its Skimmed Milk Powder segment, the firm said it registered significant year-on-year growth and said it expects a further improvement in sales in the second-half.

The company also said that despite the plummeting banking confidence in Ukraine limiting the availability of credit, it has renewed its working capital facilities and has benefited from support from the European Bank For Reconstruction And Development, which has restructured the company's loan repayment plan to take into account the devaluation of hryvna.

Shares in Ukrproduct were down 5.4% to 7.33 pence on Friday.

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Source: Alliance News

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