Ukrproduct shares slump as downturn hits dairy sales

24th Jun 2009 10:15

Shares in dairy products supplier Ukrproduct fell sharply after it said weakness in its home market Ukraine had resulted in declining sales of branded products.The firm said that, while the first quarter of the year is traditionally weak, trading did not recover in April and May, meaning that net profits for the first half will be lower than those of 2008. It noted that official figures showed a 19.5% decline in retail trade turnover in Ukraine in the first five months of 2009.Ukrproduct added that a Russian import ban on dairy products from Belarus was likely to have adverse knock-on effects, with increased volumes of Belarusian milk products being sold in Ukraine.The firm said that packaged butter sales volumes and profit margins were above management expectations and that skimmed milk powder production and export sales volumes exceeded management forecasts."Ukrproduct remains confident that it will successfully work through the immediate market challenges and continues to see significant opportunities in its domestic and export markets over the long term," the firm said."The group's cash levels are sufficient to meet current debt obligations in the short and medium term."