Ukrproduct faces H1 losses amid currency and political woe

1st Aug 2014 16:21

Ukrainian dairy producer Ukrproduct Group warned it would fall into the red in the first half due to currency headwinds and the country's political unrest.Ukrproduct, which makes branded dairy foods and drinks, said a devaluation of the Ukrainian hryvna had increased the cost of imports, although it offered export opportunities.The company said the unstable political and economic situation had also taken its toll by reducing consumer confidence, while rises in costs of essentials such as fuel had hit the population's purchasing power.Sales of the group's branded dairy products have fallen, but more raw milk availability and better pricing boosted its profits.First half sales of drinks are expected to fall versus the same period last year due to colder-than-usual summer weather and difficulties selling into Crimea, although the group expects a better second half.The company said it had enough cash to meet debt obligations in the short and medium term, but added: "The group estimates it will be loss-making for the first half compared to being profitable for the same period in the last financial year."Shares fell 1.25p or 16.1% to 6.5p at 16:32 in London.PW