August 28, 2012

Milkiland's net profit falls 6.4% during first half of 2012

Milkiland has reached EUR6.258 million (US$7.8 million) during the first half of 2012, a 6.4% decline fromthe same period of 2011.

Consolidate sales revenues grew 5.2% to EUR143.1 million (US$179 million) as EBITDA decreased 13.3%. Operational profit decreased 12.4%. Milkiland's operations were positively affected by subsidisation policy of dairy farms in Ukraine. Ergo company's EBITDA grew by 4% in the second quarter. Major reason for a decrease of net profit was a threefold increase in profit taxes. Pretax profit grew 4.6% to EUR 7.344 M (US$9.2 million) due to increase in financial revenues.

The company's report stated: "The export ban imposed by Russian Federal Service on Customer's Rights Protection and Human Well-Being Surveillance (Rospotrebnadzor) for seven Ukrainian cheese exporters, including Milkiland's Mena cheese plant, partially limited the ability of Milkiland to sell cheese in Russia On the positive side, Rospotrbnadzor's restrictions triggered a 31% drop in raw milk prices in Ukraine from the beginning of 2012, ending up on average 3-10% lower on-year." 

The company also stated that the cheese ban caused a decrease in the share for cheese and butter in total revenue from 53% in the first half of 2011 to 51% while whole-milk products' share increased from 39% to 41% (in absolute terms, sales growth for these product groups came to 1% 12% respectively).