Business news from Ukraine

DAIRY GROUP MILKILAND HAS EUR 13.4 MLN IN NET LOSS IN 2018

Milkiland, a dairy group with assets in Ukraine, Russia and Poland, in January-September 2018 saw EUR 13.42 million of net loss compared with EUR 4.55 million of net profit a year ago.
According to an unaudited report of the group posted on the website of the Warsaw Stock Exchange (WSE), revenue over the period fell by 6.6%, to EUR 98.8 million, and gross profit – by 24.4%, to EUR 15.92 million. Earnings before interest, taxes, depreciation and amortization (EBITDA) grew 1.8-fold, to EUR 4.38 million.
Milkiland in January-September 2018 saw EUR 3.41 million of operating loss compared with EUR 3.01 million of operating profit a year ago.
The loan portfolio of the group was EUR 86.2 million as of September 30, 2018 compared with EUR 86.6 million as of late 2017, mainly thanks to repayment of the indebtedness under the restructuring agreements with Ukrainian and Polish banks. Net debt of the group declined by 1%, to EUR 85.7 million as of September 30, 2018.
The Russian market provided for EUR 59.53 million of the group’s revenue, the Ukrainian market – EUR 28.93 million and the Polish market – EUR 10.47 million.
Cheese & butter segment contributed approximately 38% to the group’s total revenue. Segment’s revenue increased by 19% to EUR 37.34 million, the whole-milk dairy segment – EUR 47.33 million (48% of total revenue) and the ingredients segment – EUR 14.26 million (14%).
“In 9M 2018 Milkiland Ukraine focused on the development of sales of high value-added products, including innovative lactose-free cheese and whole milk products, primarily in the key accounts channel. The company also paid an attention to production and export sales of Kosher dry milk products and butter under the contract with key client from Israel,” the company said.
In 9M 2018 Milkiland put additional efforts aimed at the entering to new and development of the sales at the existing export markets. In line with these efforts, Milkiland Intermarket continued a development of the distribution network of the group’s dry milk products and butter in China. Additional volumes of cheese-like products were sold to the traditional market of the group in Kazakhstan, as well as other Central-Asian countries. The company also continued a fulfillment of the Kosher goods supply contract with the key client in Israel.

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DAIRY GROUP MILKILAND HAS 2.1-FOLD RISE IN NET PROFIT IN Q1 2018

Milkiland, a dairy group with assets in Ukraine, Russia and Poland, saw a 2.1-fold rise in net profit in January-March 2018 year-over-year, to EUR 2.38 million.
According to a report of the group on the website of the Warsaw Stock Exchange (WSE), revenue in Q1 2018 fell by 18.5%, to EUR 30.1 million, and gross profit – by 22.6%, to EUR 5.28 million.
In January-March 2018, the group saw EUR 74,000 of operating loss compared with EUR 3.61 million of operating profit a year ago.
Earnings before interest, taxes, depreciation and amortization (EBITDA) fell by 34.8% year-over-year, to EUR 1.58 million. EBITDA margin fell by 2 percentage points, to 5%.
The Russian market generated 67% of the group’s revenue or EUR 20.12 million, which is 19.8% less than a year ago. The Ukrainian market’s share was 25% of total revenue, a rise by 12.6%, to EUR 6.88 million. Poland occupied 8% of total revenue, a rise by 23%, to EUR 2.26 million.
Whole-milk dairy was the largest segment in terms of revenue and business segments EBITDA providing for c. 60% of revenue – EUR 18.19 million or 16% less year-over-year, cheese & butter segment contributed approximately 27% to the group’s total revenue – EUR 8.22 million (14% down). In ingredients segment, revenue declined 36% year-over-year to EUR 3.7 million depressed by unfavorable international global market conjuncture. It contributed c. 12% to the group’s total revenue.

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DAIRY GROUP MILKILAND SEES EUR 7.35 MLN NET LOSS IN 2017

Milkiland, a dairy group with assets in Ukraine, Russia and Poland, saw EUR 7.35 million of net loss in 2017, which is 81.1% less than in 2016. According to a company report on the website of the Warsaw Stock Exchange (WSE), revenue last year fell by 4.35, to EUR 140.41 million. Gross profit grew by 12.2%, to EUR 23.69 million. Operating profit stood at EUR 0.59 million compared with EUR 5.5 million of operating loss in 2016.
Earnings before interest, taxes, depreciation and amortization (EBITDA) grew 1.9-fold, to EUR 10.28 million, net debt reached EUR 85.14 million at the end of 2017 compared with EUR 101.24 million in 2016. The net debt/EBITDA ratio fell from 18.6 to 8.28. Total assets decreased by 4.8%, to EUR 160.42 million.
Russia is the largest market for Milkiland contributing about 62% to the group’s total consolidated revenue in 2017. Sales in Ukraine account for about 27% of the group’s revenue and include all range of dairy products. Poland secured 8% of the group’s total revenue in 2017, while other countries account for 3%.
At the same time, revenue in the segment of whole milk products declined by 10.2% year-on-year to EUR 73.25 million compared to 2016 (52%); cheese and butter – by 9.5%, to EUR 42.25 million (30%); in the segment of dried milk and other products, revenue increased by 34.5%, to EUR 24.92 million (18%).
Milkiland in 2017 began shipping to several new markets, in particular to Israel, China, Denmark and the Netherlands. In 2017, the group invested EUR 2.8 million to support assets in Ukraine, Russia and Poland. In 2018, Milkiland intends to invest up to EUR2 million in servicing its assets and introducing new products in key group markets. “Despite some positive steps to better results and margins, in 2017 the group did not achieve a task of restoring the profitability of its business. The current year is expected to be crucial for reaching a break-even point for generation of the new value of the business. The Group’s management is going to achieve this by continuing a policy aimed at strengthening of the market positions of Milkiland in the countries of its operations, as well as on searching for new, and advancing at the existed export markets,” the company said.

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