A deterioration of the macroeconomic situation in Ukraine and Russia has hit Dutch dairy processor Milkiland's bottom line, resulting in a loss for the first half of the year.
For the period ended 30 June, Milkiland reported a net loss of EUR24.1m, compared with a loss of EUR27.2m. Notably, operating income fell to EUR400,000 from EUR7m a year earlier.
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"Access to the group’s main export market of Russia remained limited, since restrictions against Ukrainian dairy export, as well as food export from the EU, were not lifted by Russian authorities due to continuing tensions between Russia, Ukraine and the EU," Milkiland said in a statement.
Sales for the first six months fell 3.5% to EUR97.7m.
In particular, Milkiland posted a 23% decline in revenues in its whole-milk unit, driven by the devaluation of the group’s main operational currencies and a decrease in sales volumes. Revenues from the company's cheese and butter division dropped 44% mostly on the back of the decline of cheese export sales to Russia.
As well as exporting to Russia, Milkiland has assets based in the country. Despite the issues with exports, Milkiland said Russia remained its "best performing geographical segment" for the first half thanks to the positive results of Ostankino Dairy Combine.
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