Ukraine egg products manufacturer Avangardco is on the hunt for new export markets after problems in the Middle East hit third-quarter sales.
Despite posting a net profit of US$1.1m compared to a $47.6m loss on the back of higher operating income and lower foreign exchange losses, sales fell 43% in the period to $55.1m.
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Thanks to the absence of a one-off impairment charge causing an operating loss of $19.8m last year, the UK-listed firm reported a third-quarter operating profit of $7.6m.
For the first nine months of 2015, Avangardco posted a loss of $150.5m compared with a loss of $5.7m. The company reported higher cost of goods sold per unit and a fall in revenues but also pointed to a write-down in the first half of the year on inventories, provisions for “doubtful debts” and funds deposited with a bank that went insolvent.
Operating losses were higher at $102.1m compared with $67.6m.
Sales were 50% lower at $176.5m as sales of shell eggs and dry egg products fell and as a result of foreign currency effects.
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By GlobalDataIrina Marchenko, CEO of Avangardco, said: “In Q3 and 9M 2015, we have made a number of important steps towards our strategic goals, for example, we have started to gradually increase our poultry flock at the farms outside the affected regions, with a target to grow production of shell eggs and dry egg products for export and sales through supermarket chains in the nearest future. We continued to develop exports to the EU in line with of our strategy of export expansion, where we have more than doubled exports of dry egg products in Q3 compared to Q2 2015. To date, we are exporting egg products to Denmark, the United Kingdom, Latvia and Italy. The increase in the share of sales to the EU will enable us to diversify exports and mitigate the impact following volatility in the Middle East. Our entry into Israel in September 2015 – including some profitable long term shell egg contracts – along with export permission rights and delivery to Qatar for the first time in October 2015 were also key milestones which position the company well for future growth.”
