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UKR.GB Ukrproduct Group Limted

3.00
0.00 (0.00%)
28 Mar 2024 - Closed
Realtime Data
Share Name Share Symbol Market Type Share ISIN Share Description
Ukrproduct Group Limted AQSE:UKR.GB Aquis Stock Exchange Ordinary Share GB00B03HK741
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 3.00 1.00 4.00 3.00 2.50 3.00 0.00 16:29:58
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

Ukrproduct Group Ltd Half-year Report (3606L)

30/09/2016 12:35pm

UK Regulatory


Ukrproduct (AQSE:UKR.GB)
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TIDMUKR

RNS Number : 3606L

Ukrproduct Group Ltd

30 September 2016

FOR IMMEDIATE RELEASE September 30, 2016

UKRPRODUCT ANNOUNCES UNAUDITED INTERIM FINANCIAL RESULTS FOR THE SIX MONTHSED 30 JUNE 2016

Kyiv, Ukraine - September 30, 2016 - Ukrproduct Group Limited ("Ukrproduct" or the "Group") (AIM: UKR), one of the leading Ukrainian producers and distributors of branded dairy foods and beverages (kvass), today announces its unaudited interim consolidated IFRS financial results for the six months ended 30 June 2016.

KEY FIGURES

(Figures in brackets are for the six months ended and as at 30 June 2015 when the exchange rate was

32.41 UAH/GBP compared to 36.61 UAH/GBP in this reporting period)

Total revenues decreased by 16% year on year to GBP 8.2 m (GBP 9.8 m), however in Ukrainian Hryvna the sales revenues decreased by 5%

Gross profit margin decreased to 9.2% (11.5%) resulting in gross profit decrease by 33.0% to GBP 0.8 m (GBP 1.1 m) which in Ukrainian Hryvna translated into a 25.0% decrease

Revenues in dairy branded products segment decreased by 12% year on year to GBP 5.4 m (GBP 6.3m) and the gross profit increased by 9.3% year on year to GBP 0.6 m (GBP 0.6 m)

In kvass the revenues decreased by 23% year on year to GBP 0.4 m (GBP 0.5 m) and gross profit down by 26 % year-on-year

Skimmed Milk Powder (SMP) revenues decreased by 34% to GBP 1.8 million (GBP 2.4 m) and gross profit decreased to GBP -0.1 m (GBP 0.2 m)

EBITDA decreased to GBP - 16 k (GBP 66 k)

Operating loss amounted to GBP -220 k (loss of GBP -221 k)

The negative effect of currency exchange differences amounted to GBP 0.3 million (GBP 0.5 m)

Cash balance as at June 30, 2016 stood at GBP 277 k (GBP 50 k).

CEO's REPORT

During the first half of 2016 Ukrproduct continued to experience the consequences of the storm in the Ukrainian economy in recent years. A devalued currency, a geographically contracted market place and consumers now pressured further by inflation provided a challenging business environment.

The Group's response has been to adjust its focus to relevant products, sales channels and customers providing acceptable margins and ability to pay on time. Working capital has been released and costs contained via improved productivity. Given the hryvnia devaluation increased effort has been made to develop the export business.

Trading

Volumes fell, though revenues fell only marginally in hryvnia terms. Gross margins showed an improving trend but prices remained constrained by competition and low consumer confidence and spending power. Branded products, now subject to more emphasis, showed improved revenues with the key categories of packaged butter, spreads and processed cheese advancing. Private Label contracts with only marginal profitability have been terminated. Those retained reflect the quality demanded by the retailer and commensurate margins.

The kvass beverage continued to make a good gross profit contribution. Plans are in place to extend the offering in this category with white kvass, uzvar and rose hip based healthy drinks.

Skimmed milk powder is subject to the vagaries of world prices which were not encouraging in this period. Milk prices trended upwards on the world market from midsummer. However the Group's spare spray drying capacities were utilized profitably for third parties during the period.

The continued exchange rate depreciation has facilitated the successful pursuit of export business not least to CIS countries, Russian intervention notwithstanding. Further expansion has been made into the North Africa region.

.

Finances

In the challenging trading environment hryvnia revenues have held up to within 5% of same period 2015. However whilst management efforts resulted in some improvement in gross margins, overall they remained below the required level. Although the Group made substantial progress in the second quarter, the first quarter negative result was not fully offset.

Overheads were reduced but EBITDA struggled to remain positive. This led to an operating loss which was accentuated by negative exchange differences for the period.

Cash under such trading circumstances is very much in focus. Along the lines mentioned the Company has adopted a trading model to release cash not least from working capital to fulfill its ongoing obligations. This importantly includes interest payments due to EBRD under the terms of the more favourable loan restructuring agreement signed by the end of June.

Outlook

The Group targets a return to profitability as the market place continues to work towards stabilization. Our markets will however remain competitive. Ukrproduct's strategy as detailed earlier is to target segments with differentiated products and services. In particular, pursuit of growth opportunities in beverages and export and improving the cost and service efficiency of the supply chain. Overhead reduction has included the remuneration of directors. Underpinning this all is the need to continue to create positive cash flows.

***

For further information, please visit www.ukrproduct.com or contact:

 
           Ukrproduct Group Ltd 
           Jack Rowell, Non-Executive Chairman                       Tel: +380 44 232 9602 
           Alexander Slipchuk, Chief Executive Officer               www.ukrproduct.com 
           ZAI Corporate Finance Ltd. 
           Nominated Adviser and Broker                         Tel: +44 20 7060 2220 
            Peter Trevelyan-Clark, Jamie Spotswood               www.zaicf.com 
 
 

Ukrproduct Group Ltd is one of the leading Ukrainian producers and distributors of branded dairy products and kvass, a traditional fermented beverage. The Group's product portfolio includes processed and hard cheese, packaged butter, skimmed milk powder (SMP) and kvass. Ukrproduct has built a range of recognisable product brands ("Our Dairyman", "People's Product", "Creamy Valley", "Molendam", "Farmer's") that are well known and highly regarded by consumers. The Group reported consolidated revenues of approximately GBP 20.2 million for the twelve months ended December 31, 2015 and total assets of approximately 11.5 million as at that date . Ukrproduct's securities are traded under the symbol "UKR" on AIM, a market operated by the London Stock Exchange.

Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of the Group. You can identify forward looking statements by terms such as "expect," "believe," "anticipate," "estimate," "intend," "will," "could," "may" or "might" the negative of such terms or other similar expressions. These statements are only predictions and they may differ materially from the actual events or results. We do not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in such projections or forward-looking statements, including, among others, general economic conditions, our competitive environment, risks associated with operating in Ukraine, rapid technological and market change in our industry, as well as many other risks specifically related to the Group and its operations.

 
 UKRPRODUCT GROUP LIMITED 
 UNAUDITED CONDENSED CONSOLIDATED INCOME STATEMENT 
 FOR THE PERIODED 30 JUNE 2016 AND 2015 
 (in thousand GBP, unless otherwise stated) 
================================================================== 
 
                                           Six months   Six months 
                                                ended        ended 
 
                                              30 June      30 June 
                                                 2016         2015 
                                             GBP '000     GBP '000 
 
  Revenue                                       8 192        9 766 
  including of branded and SMP 
   products                                     7 642        8 791 
  Cost of sales                               (7 436)      (8 642) 
                                          -----------  ----------- 
  Gross profit                                    756        1 124 
  Administrative expenses                       (388)        (562) 
  Selling and distribution expenses             (554)        (733) 
  Other operating income/ expenses, 
   net                                           (34)         (50) 
                                          -----------  ----------- 
  Profit from operations                        (220)        (221) 
  Finance expense, net                          (512)        (340) 
  Effect of foreign currency 
   translation                                  (346)        (514) 
                                          -----------  ----------- 
  Profit before taxation                      (1 078)      (1 075) 
  Income tax expense                             (20)          (6) 
                                          -----------  ----------- 
  Profit for the Six months                   (1 098)      (1 081) 
  Attributable to: 
  Equity holders of the Parent                (1 098)      (1 081) 
  Non-controlling interest                          -            - 
                                          -----------  ----------- 
                                              (1 098)      (1 081) 
  Earnings per share: 
  Basic                                        (2,77)       (2,72) 
  Diluted                                      (2,77)       (2,73) 
 
 
 
 
 UKRPRODUCT GROUP LIMITED 
 UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE 
 INCOME 
 FOR THE PERIODED 30 JUNE 2016 AND 2015 
 (in thousand GBP, unless 
 otherwise stated) 
==============================            ===========  =========== 
 
                                           Six months   Six months 
                                                ended        ended 
 
                                              30 June      30 June 
                                                 2016         2015 
                                             GBP '000     GBP '000 
  Profit for the Six months                   (1 098)      (1 081) 
  Other comprehensive income 
  Exchange differences on translation 
   to the presentation currency                   233      (1 986) 
                                          -----------  ----------- 
  Other comprehensive income for the 
   Six months, net of tax                         233      (1 986) 
                                          -----------  ----------- 
  Total comprehensive income for the 
   Six months, net of tax                       (865)      (3 067) 
  Attributable to: 
  Equity holders of the Parent                  (865)      (3 067) 
  Non-controlling interests                         -            - 
                                          -----------  ----------- 
                                                (865)      (3 067) 
 
 
 
 
 UKRPRODUCT GROUP LIMITED 
 UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION 
 AS AT 30 JUNE 2016 AND 31 DECEMBER 2015 AND 30 June 2015 
 (in thousand GBP, unless otherwise 
 stated) 
==========================================               ==============================  =============================  ============================== 
 
                                                                                  As at                          As at                           As at 
                                                                           30 June 2016               31 December 2015                    30 June 2015 
                                                                               GBP '000                       GBP '000                        GBP '000 
  ASSETS 
  Non-current assets 
  Property, plant and equipment                                                   7 774                          7 417                           6 970 
  Intangible assets                                                                 628                            596                             725 
  Long-term 
   receivables                                                                        -                              -                             286 
  Deferred tax assets                                                                 6                             45                               1 
  Total non-current assets                                                        8 408                          8 058                           7 982 
                                                         ------------------------------  -----------------------------  ------------------------------ 
  Current assets 
  Inventories                                                                     2 383                          1 496                           2 381 
  Trade and other receivables                                                     2 510                          1 486                           2 350 
  Current taxes                                                                     166                            349                             665 
  Other financial assets                                                             16                             11                              91 
  Cash and cash equivalents                                                         277                             93                              50 
  Total current assets                                                            5 352                          3 435                           5 537 
                                                         ------------------------------  -----------------------------  ------------------------------ 
  TOTAL ASSETS                                                                   13 760                         11 493                          13 519 
                                                         ==============================  =============================  ============================== 
  Equity and liabilities 
  Equity attributable to equity holders 
  Share capital                                                                   3 967                          3 967                           3 967 
  Other reserves                                                                (6 813)                        (6 540)                         (7 794) 
  Retained earnings                                                               5 062                          5 654                           8 327 
  Total equity attributable to equity holders of 
   the parent                                                                     2 216                          3 081                           4 500 
                                                         ------------------------------  -----------------------------  ------------------------------ 
  Non-controlling interest                                                            -                              -                               - 
                                                         ------------------------------  -----------------------------  ------------------------------ 
  Total equity                                                                    2 216                          3 081                           4 500 
                                                         ------------------------------  -----------------------------  ------------------------------ 
  Liabilities 
  Non-Current Liabilities 
  Bank borrowings                                                                 2 692                          3 206                           3 751 
  Deferred tax liabilities                                                          457                            466                             213 
  Total Non Current Liabilities                                                   3 149                          3 672                           3 964 
                                                         ------------------------------  -----------------------------  ------------------------------ 
  Current Liabilities 
  Bank borrowings                                                                 4 268                          3 121                           2 519 
  Trade and other payables                                                        3 927                          1 586                           2 494 
  Current income tax liabilities                                                     31                             18                              17 
  Other taxes payable                                                               169                             15                              25 
  Total Current Liabilities                                                       8 395                          4 740                           5 055 
                                                         ------------------------------  -----------------------------  ------------------------------ 
  TOTAL LIABILITIES AND EQUITY                                                   13 760                         11 493                          13 519 
                                                         ==============================  =============================  ============================== 
                                                                                      -                              -                               - 
 
 
 UKRPRODUCT GROUP LIMITED 
 UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS 
 FOR THE PERIODED 30 JUNE 2016 AND 2015 
 (in thousand GBP, unless otherwise stated) 
===================================================================================================== 
 
                                                    Six months ended                 Six months ended 
 
                                                        30 June 2016                     30 June 2015 
                                                            GBP '000                         GBP '000 
  Cash flows from operating 
  activities 
  Profit before taxation for 
   the six months                                            (1 078)                          (1 075) 
  Adjustments for: 
  Exchange difference                                            346                              514 
  Depreciation and 
   amortisation                                                  206                              288 
  Loss of disposal of 
   non-current assets                                              5                                4 
  Impairment of trade                                             31                                - 
  receivables 
  Disposal of subsidiaries                                       (3)                              (4) 
  Interest income                                                  -                              (1) 
  Interest expense                                               512                              341 
  Decrease / (increase) of 
   inventories                                                 (887)                            (851) 
  Decrease in trade and other 
   receivables                                                 (956)                              479 
  Increase/ (decrease) in 
   trade and other payables                                    2 143                              571 
                                      ------------------------------ 
  Cash generated from 
   operations                                                    319                              266 
  Interest received                                                -                                1 
  Income tax paid                                                (8)                             (21) 
                                      ------------------------------ 
  Net cash generated by 
   operating activities                                          311                              246 
  Cash flows from investing 
  activities 
  Payments for property, 
   plant and equipment                                          (77)                            (130) 
  Proceeds from sale of 
   property, plant and 
   equipment                                                       9                               17 
  Repayments / (proceeds) 
   from loans issued                                             (8)                             (13) 
                                      ------------------------------  ------------------------------- 
  Net cash used in investing 
   activities                                                   (76)                            (126) 
  Cash flows from financing 
  activities 
  Interest paid                                                (182)                            (343) 
  Net proceeds / (repayments) 
   from short term borrowing                                    (59)                             (20) 
  Repayments of investment                                         -                                - 
  borrowing 
                                      ------------------------------  ------------------------------- 
  Net cash used in financing 
   activities                                                  (241)                            (363) 
  Net (decrease) / increase 
   in cash and cash 
   equivalents                                                   (6)                            (243) 
                                      ------------------------------  ------------------------------- 
  Effect of exchange rate 
   changes 
   on cash and cash 
   equivalents                                                   190                               78 
                                      ------------------------------  ------------------------------- 
  Cash and cash equivalents 
   at the beginning of the 
   six months                                                     93                              215 
  Cash and cash equivalents 
   at the end of the six 
   months                                                        277                               50 
                                      ------------------------------  ------------------------------- 
                                                                   -                                0 
 
 
 UKRPRODUCT GROUP LIMITED 
 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 
 FOR THE PERIODED 30 JUNE 2016 AND 2015 
 (in thousand GBP, 
 unless otherwise 
 stated) 
====================                    === 
 
 
 
 
                                                                  Attributable to equity holders                                                  Total   Non-controlling    Total Equity 
                                                                                                                                        attributable to          interest 
                                                                                                                                         equity holders 
                                                                                                                                          of the parent 
 
                              Share capital        Share premium   Merger reserve         Revaluation          Retained   Translation 
                                                                                              reserve          earnings       reserve 
                                   GBP '000             GBP '000         GBP '000            GBP '000          GBP '000      GBP '000          GBP '000          GBP '000        GBP '000 
                            ---------------  -------------------  ---------------  ------------------  ----------------  ------------  ----------------  ----------------  -------------- 
 
  As at 1 January 2015                3 967                4 562                -               3 453             9 358       (13786)             7 572                 -           7 572 
                            ---------------  -------------------  ---------------  ------------------  ----------------  ------------  ----------------  ----------------  -------------- 
 
  Profit for the six 
   months                                                                                                       (1 081)                         (1 081)                 -           (108) 
  Other comprehensive 
   income                                                                                                                     (1 986)           (1 986)                            (1986) 
                            ---------------  -------------------  ---------------  ------------------  ----------------  ------------  ----------------  ----------------  -------------- 
 
  Total comprehensive 
   income                                 -                    -                -                   -            (1081)        (1986)            (3067)                 -          (3067) 
 ========================   ===============  ===================  ===============  ==================  ================  ============  ================  ================  ============== 
 
  Depreciation on 
   revaluation 
   of non current assets                                                                         (46)                46                               -                                 - 
  Reduction of 
   revaluation reserve                                                                            (9)                 4                             (5)                               (5) 
 
  As at 30 June 2015                  3 967                4 562                -               3 398             8 327       (15754)             4 500                 -           4 500 
 ========================   ===============  ===================  ===============  ==================  ================  ============  ================  ================  ============== 
 
  Profit for the six 
   months                                                                                                        (2825)                          (2825)                 -          (2825) 
  Other comprehensive 
   income                                                                                         913                             460             1 373                             1 373 
                            ---------------  -------------------  ---------------  ------------------  ----------------  ------------  ----------------  ----------------  -------------- 
 
  Total comprehensive 
   income                                 -                    -                -                 913            (2825)           460           (1 452)                 -          (1452) 
 ========================   ===============  ===================  ===============  ==================  ================  ============  ================  ================  ============== 
 
  Depreciation on 
   revaluation 
   of non current assets                                                                         (40)                40                               -                                 - 
  Reduction of 
   revaluation reserve                                                                           (79)               112                              33                                33 
 
  As at 31 December 2015              3 967                4 562                -               4 192             5 654       (15294)             3 081                 -           3 081 
 ========================   ===============  ===================  ===============  ==================  ================  ============  ================  ================  ============== 
 
  Profit for the year                                                                                            (1098)                         (1 098)                 -          (1098) 
  Other comprehensive 
   income                                                    (2)                                                      -           235               233                               233 
                            ---------------  -------------------  ---------------  ------------------  ----------------  ------------  ----------------  ----------------  -------------- 
 
  Total comprehensive 
   income                                 -                  (2)                -                   -            (1098)           235             (865)                 -           (865) 
 ========================   ===============  ===================  ===============  ==================  ================  ============  ================  ================  ============== 
 
  Depreciation on 
   revaluation 
   of non current assets                                                                         (83)                83                               -                                 - 
  Reduction of 
   revaluation reserve                                                                            (7)                 7                               -                                 - 
  Reclassified equity 
   items                                                                                                            416         (416)                 -                                 - 
  As at 30 June 2016                  3 967                4 560                -               4 102             5 062       (15475)             2 216                 -           2 216 
 ========================   ===============  ===================  ===============  ==================  ================  ============  ================  ================  ============== 
 
 
 
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 
 
  1. Basis of preparation 
 
 
    The unaudited condensed consolidated financial statements have been prepared 
       in accordance with International Accounting Standard 34 Interim Financial 
       Reporting. 
     The interim financial statements are unaudited but have been reviewed by the auditors. 
 
    The unaudited condensed consolidated financial statements have been prepared 
       under the historical cost convention, except for revaluation of certain 
       properties. 
 
 
    The same accounting policies, presentation and methods of computation 
       have been followed in this unaudited condensed consolidated financial 
       statements as were applied in the preparation of the Group's financial 
       statements for the year ended 31 December 2015. 
 
 
    The comparatives for the six months ended 30 June 2015 are extracted from 
       the Group's consolidated financial statements for the year ended 31 December 
       2015. The auditor's report for those accounts was unqualified, but did 
       include references to an emphasis of matter in respect of the Group incurring 
       a loss during the year as well as the uncertainty surrounding the breach 
       of loan agreement with the European Bank for Reconstruction and Development 
       (the "EBRD"). 
  Going concern 
 
   The unaudited condensed consolidated financial statements have been prepared on a going concern 
   basis which assumes that the Group will be able to meet its liabilities as they fall due, 
   for the foreseeable future. 
   The Group incurred a loss of GBP1,098k for the six months ended 30 June 2016. This is primarily 
   due to the volatile political and economic situation in Ukraine. This has resulted in a number 
   of challenges to the Group, including but not limited to the significant devaluation of the 
   local currency, the increase in raw milk prices and an overall fall in demand. 
   Despite the negative economical conditional in Ukraine the Group signed new terms in respect 
   of loan with EBRD. The previous sum of loan was divided on 2 tranches. Tranche A has maturity 
   date 01 December 2022 and interest is payable at a margin of 5% over EURIBOR per annum, tranche 
   B has maturity date 01 December 2024 and the rate at the higher of EURIBOR or 1% per annum 
   before 01 December 2022 and after this date before 01 December 2024 -at a margin of 5% over 
   EURIBOR per annum. First principal payment of the loan will be paid in accordance with new 
   schedule in the March 2017. 
   Based on the existence of these conditions, the condensed consolidated financial statements 
   have been prepared on a going concern basis, because management believes that it has employed 
   sufficient and appropriate measures to underpin its cost cutting strategy including but not 
   limited to: reconstruction of manufacturing facilities in Starokonstantinov location, decrease 
   in the number of subsidiaries and streamlining its business processes aimed to minimise non-value 
   adding activities and related costs etc. According to the new terms of the contract, interest 
   is paid in a timely manner. 
  2. Earnings per share 
 
 
   Basic earnings per share have been calculated by dividing net loss/profit 
     attributable to the ordinary shareholders (loss/profit for the year) by 
     the weighted average number of shares in issue. 
 
                                                              Six months ended                  Six months ended 
 
                                                                  30 June 2016                      30 June 2015 
      ----------------------------               -----------------------------  -------------------------------- 
  Net (loss) / profit attributable to ordinary 
   shareholders, GBP'000                                               (1 098)                           (1 081) 
  Weighted number of ordinary shares in issue                       39 673 050                        39 673 050 
  Basic earnings per share, pence                                       (2,77)                            (2,72) 
  Diluted average number of shares                                  39 629 619                        39 629 619 
  Diluted earnings per share, pence                                     (2,77)                            (2,73) 
 ---------------------------------------------   -----------------------------  -------------------------------- 
 
 
  3. Approval of interim financial 
   statements 
 
 
    The unaudited condensed consolidated financial statements were approved 
     by the board of directors on 30 September 2016. A copy will shortly be 
     available on the Company's website at www.ukrproduct.com 
 
 

This information is provided by RNS

The company news service from the London Stock Exchange

END

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