Ukrainian dairy producer Ukrproduct said it has plans in place to recover profitability after it booked a drop in full-year earnings today (25 April).

For the 12 months to the end of December, net profits dropped to GBP400,000 (US$643,800) from GBP1.09m in the prior-year. Ukproduct blamed “substantial” energy costs increase and a 25% increase in raw milk prices for the decline.

EBITDA in the period slid 29% to GBP1.86m, while sales increased 12% to reach GBP50.5m.

Sergey Evlanchik, CEO of Ukrproduct, said the trading environment has remained “challenging” with “unemployment accentuating the squeeze” on consumer disposable incomes.

Nonetheless, he added: “Within this, Ukrproduct succeeded in building its market positions and thereby sales and aggregate gross profit in core business – branded products, distribution services, export. However on the downside margins were severely curtailed by raw milk price/fuel inflation.”

Going forward, Evlanchik said there are “robust plans” to recover profitability.

“In the core business we plan to build on our momentum and further sales growth is planned. Margins will be key to this end, milk prices are stabilising at a lower level and a major cost saving capital expenditure programme is underway at Starokostiantyniv manufacturing plant.”

Click here to view the full earnings release.