London-listed Ukrainian dairy firm Ukrproduct has forecast “improved” half-year profits.

Ukrproduct said lower prices for raw milk, higher sales of cheese and the decision to start selling traditional fermented beverage kvass helped the results.

The company, which will report its half-year results in September, said on Friday (13 July) it expects to report a “good gross profit result” despite “very high” fuel inflation and the consequence of an over-supply of skimmed milk powder. Russia’s ban on hard cheese imports from Ukraine led to an increase of cheese, butter and skimmed milk powder in the firm’s domestic market. However, the company said the higher volumes prompted by the ban did lead to a “gradual decrease” in raw milk prices.

Ukrproduct said the increase in gross profit should lead to an “encouraging improvement” in EBITDA and net income.

Looking ahead, however, Ukrproduct warned margins would be “pressured” as seasonal milk prices increase. It said plans to “optimise” costs and a recent loan from the European Bank for Reconstruction and Development would be “critical” to its success.