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UKR Ukrproduct Group Limited

3.00
0.00 (0.00%)
Last Updated: 00:00:00
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Ukrproduct Group Limited LSE:UKR London Ordinary Share GB00B03HK741 ORD 10P
  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 2.00 4.00 - 0.00 00:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Dry,condensd,evap Dairy Pds 39.11M -804k -0.0203 -1.48 1.19M
Ukrproduct Group Limited is listed in the Dry,condensd,evap Dairy Pds sector of the London Stock Exchange with ticker UKR. The last closing price for Ukrproduct was 3p. Over the last year, Ukrproduct shares have traded in a share price range of 1.50p to 4.50p.

Ukrproduct currently has 39,673,049 shares in issue. The market capitalisation of Ukrproduct is £1.19 million. Ukrproduct has a price to earnings ratio (PE ratio) of -1.48.

Ukrproduct Share Discussion Threads

Showing 301 to 321 of 350 messages
Chat Pages: 14  13  12  11  10  9  8  7  6  5  4  3  Older
DateSubjectAuthorDiscuss
10/3/2014
14:44
Seems like the situation is about what one would expect. It's encouraging that they've issued the RNS and it makes a decent attempt at giving the information shareholders need.

All UKR's investment in its plant should give it a decent chance of being competitive in exports. The risk is very high though: dairying needs banks because there's so much inventory and it's easy to become insolvent.

I guess the shares will bounce on the announcement of an EU/US/IMF loan package for Ukraine, but with a deep recession in prospect, it's going to be 2015 or 2016 before they can post any decent trading.

mirako
10/3/2014
12:14
In other words "we just don't know how long we can carry on for like this"
envirovision
10/3/2014
07:06
TRADING UPDATE
Kyiv, Ukraine - March 10, 2014 - 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 the following trading update.

The unstable political and economic situation, as to be expected, is having an adverse effect on businesses throughout Ukraine including Ukrproduct Group.

The Company revenues in hryvna year-to-date have been below expectations as consumer confidence has fallen, a range of open markets servicing mass and mid-market 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.

Overall, sales have also been adversely affected as higher unit costs due to a currency devaluation of the hryvna and sustained high raw milk prices has necessitated the consumer price increases.

As a result, key categories have experienced lower sales levels. The sales volumes of processed cheese in January-February decreased year-on-year but showed a slight increase in hryvna terms. Sales of packaged butter dropped but in hryvna terms the decrease was less significant than in tonnage.

At the same time hryvna devaluation is having a positive influence on the export revenues thus Ukrproduct will aim to grow its export oriented sales.
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.

The banking confidence in Ukraine has also fallen and this is limiting credit facilities. Ukrproduct Group is managing the situation and currently has sufficient support of its banks. Ukrproduct also continues its cooperation with the European Bank for Reconstruction and Development in addressing the current challenges.
In summary, the current environment in Ukraine has led to performance below expectations year-to-date. In the context of the general political and economic environment Ukrproduct Group 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.

skinny
07/3/2014
09:15
THanks for that. I was going out last night and being distracted by two toddlers so I was trying to take shortcuts. Once I 'd finished typing, I had a feeling I had it wrong and needed to do it all bit by bit. Thankyou for taking the time to do so.

Whilst I agree that the account numbers will probably be something like you describe, do you not feel portable assets like the £10m of plant and machinery and vehicles will have real values that are driven more by international prices and could then be worth more than book value depreciated in Hvrynia? (Land and buildings much less so, if at all.) I just feel that could throw £2m back onto NAV in break-up value, even if it doesn't actually show that in the accounts.

I'm still being distracted by two toddlers!

aleman
06/3/2014
21:33
You need to devalue the assets figure rather than the debt figure.

My estimate before was rough but I'll try to be more precise. I'm working off the 2012 annual report since there was no UAH balance sheet in the interims. The revenue translation in the interims suggests an FX rate of 12.3 there.

Anyway, the annual report gives total assets of £33.676m, less intangible assets of £1.238m, gives total assets of £32.4m.

On the other side, there's a EUR 7m loan translated into sterling at E1.22 to the pound to give £5.72m. (Before I assumed the full E11m had been drawn but better to stick to the Dec 2012 balance sheet date I guess). There are £8.65m of other liabilities which for the sake of convenience I'll assume are all UAH.

Stated currency rate on the balance sheet date is 12.9 to the £. At present I see the UAH showing at 15.8/£ so an 18% devaluation as you say. Retranslating the the total assets at that rate gives you £26.5m.

Retranslating the euro loan at 1.215 to the £ gives £5.76m. Retranslating the UAH liabilities at 15.8 gives £7.06m. So total liabilities would be £12.8m.

Assets of £26.5m minus liabilities of £12.8m would give a tangible asset value of £13.7m so down about £4.3m if the current exchange rate had prevailed at the Dec 2012 balance sheet date.

Taking that forward to the interims, the assets are a little higher, but some of that is the exchange rate and they've drawn more on the loan. They presumably drew still more on the loan in H2 2013. Thus I think my estimate of a nominal £5m hit to the balance sheet is a decent working assumption but glad to be corrected if I've got it wrong.

mirako
06/3/2014
18:40
The Hrvynia is up another 2.5-3% again today against the major currencies.

Are you taking the hit from the finals or interims? The interims show NAV ex-intangibles up to £19m on a closing exchange rate of around 12.7 to the £, with the average being similar at around 12.75. I'd like to know how you get a loss of £6m. The annual report currency analysis lists assets as £9.3m in UAH and £1.2m in USD. Liabilities are ££7.7m in UAH and £5.9m in EUR. Since then a further 1.3m Euros has been drawn but 600k Euros repaid. That would be about £0.6m net taking liabilities to £6.5m in total? 18% devaluation (slightly less for Euros than sterling) would be a hit of about £1.2m? That's a long way off your £5/6m. This is only a simple examination, though. What have I missed?

aleman
06/3/2014
17:13
At a crude estimation, the hit to NAV from the currency devaluation is about £5m, putting the NAV ex-intangibles at £13m or so. What's needed is confidence UKR can make operating profits in the foreseeable future and has the intention of using them for the benefit of shareholders.
mirako
06/3/2014
16:30
I still hold here, I think something will get worked out either politically, on the balance sheet side or ideally both. Is looking rather cheap now. I'm at my full allocation here though. GLA chaps!
sirhedgealot
06/3/2014
12:25
UKR market cap now down to £3.1m versus net current assets of £5.1m and NAV ex-intangibles of £18m. That's a big discount which seems to assume the company only has a small chance of surviving Ukraine's troubles. The 5 manufacturing assets (plus one under construction) are in Western Ukraine. There are 5 of the 9 distribution assets in the East but none in Crimea. They are held through subsidiaries which could perhaps be sold off piecemeal if necessary.
aleman
05/3/2014
17:35
The Hvrynia rose around 2.5% today against the major currencies. 2.75% against the Euro.
aleman
05/3/2014
17:09
@Aleman

I think the FX rate is very unlikely to rebound: it was extremely overvalued before and the refusal to devalue was one reason the IMF wouldn't lend. In the long-run, a more competitive exchange rate is good news for an exporter like UKR, but in the short-run it's a nasty financial shock.

mirako
04/3/2014
21:02
I wondered if there might be an RNS to clarify such issues.

I see from the annual report that the holding company owns 32 trading subsidiaries. These include 5 production companies (plus one under construction), 10 sales and distribution companies, and numerous others for asset ownership, exports and logistics. It might be possible to sell off one or two to pay debt down, I would imagine, not that I feel there is any need to do so at this stage. (Let's see if we get a modest loss in this year's finals.)

The annual report gives a table of change in profit for currency changes. A 20% fall against the $ reduces pre-tax profit by £212k and a 20% fall against the Euro increases profit by £1.176m. That was with nearly £6m of Euro denominated debt! This is on outdated 2012 numbers, though, and exports have been curtailed since then due to the problems recovering VAT. It still quotes a £764k rise in ptp for a 20% fall against the Euro for 2011, when exports were a little less than half as much. This seems to suggest a fall in the Hvyrnia could still be a slight benefit even on lower exports.

Edit - The report actually shows ptp changes for a 10% change and I doubled them since the Hrvynia has fallen a little over 20%. After thinking about it, I realise it may not be a linear relationship so please bear in mind that my doubling the numbers could be inaccurate. I suspect the exchange rates will rebound in days ahead, anyway.

aleman
04/3/2014
19:22
From what I was able to see of the TW's comments (full article was members only), I agree. TW is spectacularly wrong on many of his comments, he's just not worth paying any notice.

It is not as if Russia hasn't already caused UKR problems over the years with its erratic trade policies. Still too early to call, but like you it's not hard to imagine scenarios where UKR may actually benefit longer term from the current crisis.

valhamos
04/3/2014
18:09
I think that's a poor assessment. £5m debt isn't so bad compared to £5.1m net current assets, £19m of fixed assets and £18m of net assets ex-intangibles. I'm wondering if reduced demand from Russia for Ukrainian milk will actually help UKR's margins.
aleman
25/2/2014
08:07
Odd - spread has gone to 10.0/10.0.

All UKR's factories seem to be in Western Ukraine.

aleman
22/1/2014
22:59
It seems like the stock is finally showing some sensitivity to the political news from Ukraine.

Assuming there is no political change then most likely the currency stays broadly stable, at least until next year's elections, but it's hard to see the economy doing much.

If there were political change then it probably means a big currency devaluation. That would hit the UKR balance sheet in sterling terms, most likely trigger a recession in Ukraine, but leave the potential for better export performance and domestic growth if UKR got through it. The EBRD loan in euros is a nasty liability in this scenario.

Either way, I continue to watch with interest, but don't like the risk/reward for now.

mirako
20/1/2014
07:25
Kyiv, Ukraine - 20 January 2014 - Ukrproduct Group Limited ("Ukrproduct" or the "Group") (AIM: UKR), one of the leading Ukrainian producers and distributors of branded dairy foods and beverages, today announces that pursuant to the resolution of the National Commission on Securities and Stock Market dated January 14th, 2014 the Company's shares have been approved to be admitted to trading on the Ukrainian stock market.

It is expected that 581,400 ordinary shares of 10 pence each will be admitted to trading on the Ukrainian Stock Market and the dealings are expected to commence shortly. No new ordinary shares have been issued and accordingly the total number of shares in issue remains unchanged.

The Directors believe that Ukrproduct Group Ltd is the first Company listed outside of Ukraine to be admitted to trading on the Ukrainian Stock Market since the adoption of new Regulations allowing the dealings in foreign securities in the territory of Ukraine in January 2013. The relevant official announcement of the National Commission on Securities and Stock Market (in Ukrainian language) can be found here -

Sergey Evlanchik, CEO of Ukrproduct Group commented: "We are pleased with the prospect of having the Company's shares admtted to trading on the Ukrainian Stock Exchange. We expect that the listing on the Ukrainian Stock Exchange will allow us to improve the liquidity of our shares."

skinny
13/1/2014
12:44
Financial Times: Cargill, the US-based agriculture trading group, has doled out $200 million for a stake in UkrLandFarming, Ukraine's largest agribusiness holding, in a potentially far-reaching deal that sources said would see both groups partner up in future grain exports to China and other growing markets.
davebowler
09/1/2014
09:52
Well, I think it's fair to say they have been marked down belatedly after results, and are now seriously undervalued, in my opinion, unless the results turn out to be pretty bad. (I doubt this from the tone of the recent update but you never know.) I do wonder why they were up over 10% for a while this morning, even if ADVFN don't show it on their chart.
aleman
05/1/2014
22:50
A well reasoned response for which I think you. It is always a rare pleasure to have a poster on ADVFN to highlight his disagreement so pleasantly.

I'm not saying I can assess this as such in the normal sense. The outlook is too unclear. A non-holder can use this as an excuse avoid risk and walk away and I would generally applaud it. If they can make steady returns or better elsewhere with low risk then they should try and protect their capital - but for the problem, mentioned before, that low risk is sometimes just a perceived low risk that turns out not to be and high risk often later turns out to have been exaggerated . Risk is extremely hard to assess and the market regularly gets it wrong. I speak as an ex-holder of Sportingbet where the risk of US legal action was clearly underestimated and of West China Cement where the P/E dropped to one for reasons I still don't understand. People thought it must be risky because the P/E was only one yet it grew turnover and earnings and went on to more than 10-bag.

However, as a holder of UKR, I have to decide if the shares are overvalued, and I should sell, or was I correct in my original decision to buy for recovery in earnings while protected as I waited by the cushion of a very large discount to assets. Given the discount to NAV and NAV ex-intangibles is nearly 80%, it feels like there will still be a cushion against small losses for a year or two. The small fall on the news of CFO walking and the small rise on the report of a likely loss and the hope of recovery does suggest that the cushion is working. Many other shares trading at a large premium to NAV would have plummeted by 50% or more. It suggest the downside is limited on the current outlook or something similar for a year or two. That could change of course such that a reassessment was necessary. It might get better or it might get worse. Given I can't predict how much more likely one is than the other, I can only then look at how much it can move in each direction on reasonable 3-year outlook. I would say the downside is 100% and the upside is 500-1000%. Those odds looks pretty good to me so it looks worth a flutter. The hard question for me, given the temptation to flutter, is what I am prepared to risk in exposure level. That one I am working on.

(I'd agree with your viewpoint if it were trading at NAV or maybe as low as 50% of NAV (remembering that the balance sheet assets look much better quality than some businesses) - that would reduce the multibagging potential greatly. It's only because the discount is pushing 80% that I think the potential makes the continued holding worthwhile for now. At what % discount that changes, I could only really guess. My guess maybe 60%ish. I think the shares should be closer to double the current price despite the bad news, but that would be based on only a crude guess. If they were 20p or so, I might agree with you and sell.)

aleman
05/1/2014
21:23
Hi Aleman

Thanks for your thoughts.

"That's a bit of a cop-out" Not a cop-out but a reflection that I personally cannot assess this. If you can then all the best if you choose to increase your holding. I will continue to stick with what I have; I like to give my investments a few years to prove themselves, but the picture for me is less clear than when I bought 12 months ago.

In 2012 the company produced the same pre-tax profit as it did in 2006, despite 50% higher sales (ignoring distribution services). And this reduction in margins is despite the introduction of higher margin hard cheese from 2007 onwards and kvass in 2012.

Yet capital employed in the business has almost doubled in these six years so returns on capital have halved. In 2012 the average interest rate on its loan was 12.9% (approx 8.5% on the important EBRD loan) yet profit before interest and tax was only 6.6% of capital.

And now in 2013 we are going to get a loss. So clearly that the company trades on a large discount to NAV is justified. The only reason for that to change is its prospects (it is not going to be liquidated tomorrow). A few years ago prospects here looked bright and again in 2012 there looked to be a recovery in prospect. The company has clearly been hit by the weakness of the Ukrainian economy and the vagaries of the Russian ban, and then its removal, on Ukrainian exports impacting milk prices. Of course the picture would be transformed if the company could put together a couple of years of improved margins and get return on equity back to somewhere near 10% (let alone the 20% level it attained in 2007). Then the discount to NAV would be eliminated.

But I wasn't really saying anything about political risk, other than that the constantly changing political landscape is causing economic uncertainty. This is hardly a surprising comment - and was in fact endorsed by the report I linked.

valhamos
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