Ros Agro, the UK-listed Russian holding company behind food maker Rusagro, has warned it expects its profitability to come under pressure again this year after seeing a squeeze on its margins in 2016.

Maxim Basov, Ros Agro’s CEO, pointed to exchange rates, an over-supply of crops and sugar and muted consumer demand.

“Following the current foreign exchange rates and trends on the world food markets, the company expects margin to continue to be challenged
during 2017 due to the strong rouble, surplus of agricultural crops and sugar in Russia and weak consumer demand,” Basov said.

In 2016, Ros Agro saw its net profit fall 42% to RUB13.68bn (US$229.6m). The company provided a figure for adjusted EBITDA of RUB18.2bn, down a quarter on 2015.

Sales rose 16% to RUB84.28bn. Basov said Ros Agro’s profitability was affected by the appreciation of the rouble, while its agriculture and sugar divisions were also affected by lower sales prices.