Consumers switching to cheaper dairy products have hit annual profits at London-listed, Ukraine dairy group Ukrproduct.
The company today (21 April) reported that its pre-tax profits fell 54.3% in 2009 to just over GBP1m. EBITDA dropped 27.5% to GBP3.2m. Sales fell 16.9% to GBP43.2m.
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The percentage falls were less steep when measure in Ukrainian hryvnia, which fell against sterling by almost 24% when compared to 2008.
Nevertheless, when measured in Ukraine’s local currency, pre-tax profits fell 42%, EBITDA was down 8.3% – even if sales were up 5.2%.
Ukrproduct said sales of branded products, which account for over 60% of turnover, fell by 21% in 2009.
“The Ukrainian dairy market was impacted by the decline in consumers’ purchasing power and the subsequent switch of consumer demand to cheaper dairy products,” said Ukrproduct CEO Sergey Evlanchik.
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By GlobalData“We recognised changing market conditions and optimised our product portfolio in response, focusing on growth in more affordable market segments. Ukrproduct adjusted its output and production facilities to take advantage of growth in these segments, while also focusing on reducing costs and keeping bad debts at a low level.”
He added: “We expect the situation is likely to remain challenging in 2010. We will therefore continue to pursue our adopted strategy and seek to reduce costs and improve profitability.”
