Ukproduct, the UK-listed Ukrainian dairy firm, has said it will book a loss for 2013 amid higher raw milk prices and interest on a loan from the European Bank for Reconstruction and Development.
The company has borrowed money from the EBRD to fund upgrades to its production of butter and spreads. However, it said a “sizeable increase in interest charges” meant it would report “negative net profitability” for the year. In 2012, it made a profit aftertax of GBP850,000 (US$1.4m).
Ukrproduct said “ongoing high raw milk prices” was a factor that would hit its EBITDA. It pointed to higher prices domestically, where there has been a “shortage” of supply, and globally. EBITDA, the company said, would be “significantly lower” than last year. In 2012, Ukrproduct’s EBITDA jumped 68% to GBP3.2m.
The group said margins would remain under pressure from milkk and utility costs but added it “plans to return to positive profitability in 2014”. Ukrproduct plans to invest in the marketing of fermented beverage kvass and is looking to see the benefits of moves to “optimise” costs.
The company’s full results for 2013 will be published in April.