10th Mar 2014 12:35
LONDON (Alliance News) - Diary products producer and distributor Ukrproduct Group Ltd Monday said revenues in hryvna terms for the year-to-date have been below expectations due to low consumer confidence in conflict-stricken Ukraine.
The company said the unstable political and economic situation in Ukraine is having an adverse effect on businesses throughout Ukraine.
Ukraine is in crisis after Russia moved to assert control over the Crimea in the wake of the ousting of former Ukraine President and Moscow ally Viktor Yanukovych. The country has a fledgling new leadership struggling to assert control over Crimea and the wider east of the country.
Ukrproduct said a range of open markets serving mass and mid-markets have closed and a number of agents in other sales channels have withdrawn from the market "not least for the reason of bad debt risk".
The Ukrainian firm said its sales fell after it was forced to hike price to cover sustained high raw milk prices and as the currency devaluation of the hryvna also weighed.
Ukrproduct said sales volumes of processed cheese in January and February fell year-on-year but showed a slight increase in hyrvna terms. Sales of packaged butter on the other hand dropped but in hryvana terms the decrease was less significant than in tonnage.
The company said it plans to grow its export-oriented sales because the hryvna devaluation is having a positive influence on the export revenues.
"On the other hand the sizable increase in US Dollar exchange rate will significantly decrease the consolidated results of the company after the translation into the presentation currency of GBP Sterling," it said.
In addition to a lack of consumer confidence, Ukrproduct said banking confidence has fallen limiting credit facilities. The company said it is managing the situation and has sufficient support of its banks.
Looking ahead, Ukrpoduct said in the context of the political and economic environment in Ukraine it has adjusted its business model.
"The financial outcomes of such model are planned to allow Ukrproduct to carry through the current environment as far as it can be assessed successfully," it said, without giving any details.
The stock was trading at 7.40 pence Monday morning, down 0.48 pence or 6.1%.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
Copyright © 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
Ukrproduct