Ukrproduct Share Discussion Threads

[andy] 27/6/2006 11:16

I looked at this company earlier in the year, but the knowledge I had of the Ukranian economy through holding and following JKX, and the obvious harm being done by the increased gas prices put me off.

I feel they are in for some more of the same, as there will be pressure from Russia and Turkmenistan to increase gas prices further IMO.

Ukrain really has to decide which direction they are going, and get on with it ASAP. They are currently suspended in a void between Russia and the EU.

-------------------------------------------

LONDON (AFX) - Ukrproduct Group Ltd said it expects to report substantially
lower first-half and full-year pretax profits as a result of difficult trading
conditions in Ukraine, although no figures were released.
Although trading in the first quarter was in line with expectations, the
consequences of the country's negotiations with Russia have impacted the whole
Ukrainian dairy sector, said the company in a trading update.
It said exports of hard cheese from Ukraine to Russia have been severely
restricted, and as a consequence, Ukrainian hard cheese manufacturers have both
reduced prices and released excess products on to the Ukrainian market. Some of
this excess supply has been converted into processed cheese thereby affecting
pricing within this market.
A statement from the company added, on a positive note, its volumes and
margins of packaged butter as well as the production of skimmed milk powder and
export sales are in line with expectations. In addition, it believes there are
early signs of a reduction in the excess stocks of hard cheese.
[e-mail]
nes

[jonwig] 27/6/2006 08:18

Hardly surprising, the drop after this morning's body-blow of a trading update. It's the first time they've actually acknowledged the scale of the problems facing the Ukrainian economy.

Wish I could change the Header title, but it's what I thought at the time...

[roughjustice] 27/4/2006 20:09

Neither am I

[jonwig] 25/4/2006 07:17

These are pretty good final results, with eps of 5p: considering the political worries (including cost of gas) I think the current rating - a P/E of 11x - is about right.
I'm not tempted to buy back in.

[grantmac] 27/3/2006 23:02

The reason this fell late last week is that Tom Bulford (Sleeper Stocks) issued a sell note. Reckon it has further to go post results.

[jonwig] 25/3/2006 12:13

Maybe crumbling ahead of forthcoming elections, which could be a reversal of the last?

[jonwig] 08/3/2006 16:32

Here's the FT article:

Ukraine struggles to cope with gas price rises as economy falters
By Stefan Wagstyl in London and Tom Warner in Kiev
Published: March 7 2006

Ukraine's government faces mounting difficulties coping with the impact of the recent rise in gas prices by Russia amid signs of growing inflation and declining economic growth.

The disappointing economic news will put new pressure on the administration of president Viktor Yushchenko as it prepares for parliamentary elections later this month.

Official figures published on Friday showed consumer prices rose 3 per cent in the first two months of 2006 - an annualised rate of 19 per cent and far ahead of the government's 10 per cent target.

Earlier data showed weak gross domestic product growth in January of 0.9 per cent compared with the same month a year ago. With no formal government forecast for GDP for 2006, ministers informally predict growth about level with the 2.6 per cent recorded last year, down from 12.1 per cent in 2004.

However, with continuing uncertainty about the impact of the gas price rise and the prospect of further increases in the second half of 2006, observers say the country could face a recession. Igor Burakovsky, director of the Institute for Economic Research and Policy Consulting, an independent Kiev think-tank, said: "The risk of recession exists and the probability is rather high." Goldman Sachs, the US investment bank, warned in a report last week: "There is a moderate chance that a second gas shock could push the country into recession."

Last year's decline in growth had been widely expected, as the 2004 GDP figure was inflated by high steel prices, favourable weather for farming and social spending. However, the government had forecast a recovery in 2006 with GDP growth of about 5 per cent.

However, the increase in the average price for imported gas from $60 per thousand cubic metres to $95 has hit recovery hopes. Some of the increase has been passed on to industry, which has seen prices increase by 67 per cent. The government has refrained from increasing prices for residential consumers and public heating companies and is forcing the state-owned energy company Naftogaz to bear the costs. Prices for consumers and heating companies are expected to rise after the election.

Jeffrey Franks, International Monetary Fund representative in Kiev, urged the government not to raise budgetary subsidies to protect gas users. "The good outcome involves making adjustments to increase energy efficiency which permit greater growth in the medium-term, make the country less dependent economically on Russia and reduce the scope for corruption," he said. "But if the Ukrainian government swallows increases, there will be fewer adjustments and fewer benefits."

*Lech Kaczynski, president of Poland, yesterday attacked plans for a German-Russian gas pipeline as being "completely against the interests of Poland", writes Hugh Williamson in Berlin.

On the eve of a visit tomorrow to Berlin for talks with Angela Merkel, German chancellor, Mr Kaczynski told Der Spiegel magazine that there was "no economic basis for the gas pipeline. We are a partner of Germany, so why this pipeline, that skirts around Poland's borders?" He said his discussions to date with Ms Merkel on this issue were "not satisfying or constructive".

[jonwig] 07/3/2006 15:18

Quite so, GrantMac.

Look at the share price action in December after a pretty mild profits warning.

[grantmac] 07/3/2006 14:36

I don't normally do this as I'm not a shorter or a deramper. But the strength of UK Products in recent weeks has intrigued me. There was a small item in this mornings FT stating that the Ukraine economy is starting to suffer from the gas price increase at the beginning of the year (as you would expect!) "Official figures published on Friday showed consumer prices had risen 3 per cent in the first 2 months of 2006 - an annualised rate of 19%. Earlier data showed weak GDP growth in Jan of 0.9%. With the prospect of further gas price increases in the second half of 2006, observers say the country could face a recession" (FT 7/3/06 P8)

With Directors selling as well the current strength defies logic.

[fishman] 01/3/2006 09:41

Look at the holdings:
Near 80% tightly held.
Of course these guys need to release a few!
Only about 42m shares in issue, thus about 8.5m potentially liquid. Though for sure there will be some sizeable but none-accountable institutional holdings.
The price is sticking/rising I reckon because of supply and demand.

[mcooke01] 24/2/2006 13:24

Certainly curious. There must be something else going on.

[jonwig] 24/2/2006 12:03

Another sale, yet the share price is on the rise. Very strange!

Further to the announcement on 23 February 2006, Crensel Finance Ltd ("Crensel")
and Densim Group Management SA ("Densim") have today each disposed of a further
100,000 ordinary shares of 10p each in the Company ("Ordinary Shares"), each
representing 0.24% of the Company's issued Ordinary Share Capital, at 62.5p per
Ordinary Share.

[jonwig] 23/2/2006 10:21

I wasn't aware (or had forgotten) that Crensel and Densim were nominees for the directors.
Anyway, this might start a bit of crumbling...

The Company announces that on 22 February 2006, Crensel Finance Ltd ('Crensel')
and Densim Group Management SA ('Densim') each disposed of 162,617 ordinary
shares of 10p each in the Company ('Ordinary Shares'), each representing 0.39%
of the Company's issued Ordinary Share Capital, at 60p per Ordinary Share.

Crensel and Densim are jointly owned in equal shares by two of the Company's
directors, Messrs Sergey Evlanchik and Alexander Konstantinovich Slipchuk.

Following this disposal, Crensel and Densim will each be interested in
14,837,383 Ordinary Shares in the Company, each holding representing
approximately 36.0% of the Company's issued Ordinary Share Capital.

[grantmac] 01/2/2006 10:50

Now the Russians have blocked imports of Dairy products from the Ukraine. I would be surprised if this was not impacting the company. Still not a flicker.

[roughjustice] 27/1/2006 09:03

I am watching, but don't understand. Thankfully JKX is storming already as a short position. I will keep a watch on UKR.

[grantmac] 26/1/2006 09:24

I cannot for the life of me understand why these are still holding up. Yesterday, the Prime Minister threatened to cut off gas supplies for industrial companies in the country. They have some serious issues in the Ukraine at the moment and still this doesn't budge.

[roughjustice] 23/1/2006 09:30

Well I am out, prefer the short term action on JKX at the moment.

[grantmac] 19/1/2006 09:57

Roughjustice. I agree. I think someone is propping this up.

[roughjustice] 19/1/2006 09:07

I am being abandoned, my suggestion is that there is lots of bad news and yet the share price has held pretty much, and is still above the floatation price.

[flashheart] 17/1/2006 19:07

I considered for a long time and eventually exited yesterday. I still like it long term and will keep a close eye but think there may well be a lower opportunity in the short term. May be wrong but we shall see.

[roughjustice] 16/1/2006 22:33

Im still in, but considering exiting. Just not yet tho.

[grantmac] 16/1/2006 10:31

jonwig. Thanks for the article - very, very interesting.

I got rid of 30k shares on Friday. Intrigued me to see that the bid didn't move at all. Someones supporting this.

[jonwig] 14/1/2006 16:44

Seems we're all out, chaps.
But I'll keep the thread up-to-date, as all this research shouldn't be wasted.

Also will use it to post some general political/economic stuff, such as this - scary stuff on The Ukraine, USA, Russia, Iran ...

[fatso] 13/1/2006 13:00

The gas deal negotiated by Yekhanurov Governement with Gasprom
was a good deal for both contractors: Ukraine paying still much below
the market price for gas, say $90 per 1 thos m3. Gasprom(Kremlin) flogging
the gas to them extorted from the landlocked Turkmenistan at the price of $50 per thos m3. Some 100% instantaneous profit for the Kremlin and a chance for Ukraine to adjust itself slowly to the buffeting winds of world economy.

Now it is the water under the bridge, of course. Parliament has dismissed the Governement. Madame Timoshenko, Chief Thief of russian gas in the past, much to be seen in saddle again.

Yes, time to bail out, gentlemen. Hold tight to your parachute cords.

[grantmac] 13/1/2006 12:18

Another one who's just sold. I have sold for the following reasons:

1. The announcement in December was essentially a profit warning and I am superstitious enough to believe that these do come in 3's. More importantly, the cost and price pressures that the skimmed milk business is suffering from are not likely to go away in the short term. In fact they will have probably got significantly worse since the gas deal and will probably impact the whole business

2. The gas price deal that the Ukraine did will hurt the country and the company in several ways - higher energy costs plus lower disposable incomes. Again, I don't believe this will be short term. A doubling of energy costs plus greater exposure to the market rate for gas is a very significant change.

3. The Ukrainian currency is under pressure and will remain so while the political uncertainty exists. This may help exports, but it will hurt when translating the figures into sterling.

4. The sacking of the Ukranian government significantly increases the political risk.

I will continue to watch from the sidelines. Good luck to all those still holding