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Ukrproduct profits hampered by exchange rate differences
Ukrainian branded dairy foods and beverages distributor Ukrproduct Group swung to an operating profit in its most recent trading year, but despite a record improvement to its EBITDA, the group still expected to report an overall loss for the year due to the negative impact of exchange rate differences.
In its year-end trading update, Ukrproduct said it expects to report an increase to its revenue and gross margin, contributing to the improved EBITDA and positive cash flow generation that brought it to an operating profit of UAH 16.2m, versus the loss of UAH 7.4m posted a year earlier.
With the Ukrainian economy showing encouraging growth in GDP throughout 2017, with increased wages leading to an improvement in consumer confidence, the operating environment remained competitive, but the group's trading opportunities still "improved domestically" and the weakening of the hryvna was also said to have provided Ukrproduct with additional business development opportunities in its export markets.
The group expects to report improved revenue of approximately UAH 1bn thanks to the stronger gross margin, and increasing sales of branded products in its key segments of packaged butter and processed cheese.
Moving forward, the group said, "Ukrproduct will continue to work to enhance its operating profitability and cash flow generation and continue to seek to improve its competitive position in the markets in which it operates."
As of 1040 BST, shares had lost 10.53% to 4.25p.