TIDMUKR
RNS Number : 1528S
Ukrproduct Group Ltd
28 September 2017
FOR IMMEDIATE RELEASE September 28, 2017
UKRPRODUCT ANNOUNCES UNAUDITED INTERIM FINANCIAL RESULTS FOR THE
SIX MONTHSED 30 JUNE 2017
Kyiv, Ukraine - September 28, 2017 - Ukrproduct Group Limited
("Ukrproduct", "UPG" 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 2017.
KEY FIGURES
(Figures in brackets are for the six months ended and as at 30
June 2016 when the exchange rate was 36.61 UAH / GBP compared to
33.68 UAH /GBP in this reporting period)
Total revenues increased by 82% year on year to GBP 14.9 m (GBP
8.2 m).
In Ukrainian Hryvna this represents an increase of 67.8%.
Gross profit margin increased to 11.4% (9.2%) resulting from a
gross profit increase of 124.4% to GBP 1.7 m (GBP 0.8 m). In
Ukrainian Hryvna this represents an increase of 107.1%.
Kvass revenues have increased by 30.2% year on year to GBP 0.5 m
(GBP 0.4 m) with gross profit in this area also increasing by 20.8%
year-on-year.
Skimmed Milk Powder (SMP) revenues have increased by 127.2% to
GBP 4.1 million (GBP 1.8m), however the gross profit in this area
decreased to GBP -0.6 m (GBP -0.1 m).
EBITDA increased to GBP 696 k (GBP - 16 k) year on year.
Operating profit amounted to GBP 408 k (loss of GBP -220 k).
The negative effect of currency exchange differences amounted to
GBP 0.2 million (GBP 0.3 m).
The cash balance as at June 30, 2017 stood at GBP 237 k (GBP 277
k).
CEO's REPORT
The business environment improved overall in the Ukraine as GDP
increased by several points. Consumers became somewhat more
positive as minimum wages were increased.
The dairy market place continues to be competitive.
Trading
Volumes & revenues increased substantially over the same
period in 2016.
Branded sales improved overall, with the main categories of
packaged butter improving and processed cheese sales leading the
way. Hard cheese & spreads sales have remained consistent.
Gross margins have more than doubled given the volumes &
seasonal falling milk prices. Private label sales fell as low
margin business was reduced. The kvass beverage sales improved,
helped by a new cider product.
Export sales were even more buoyant given impetus by the
exchange rate. Butter sales improved tenfold in volume & gross
margin.
SMP continues to be a negative given low prices worldwide. The
spray drying facility has been utilised for contract processing.
Sales have improved & delivered a very strong profit
contribution of GBP250k.
Finances
In the half year to June 2017 as stated, sales revenues
increased substantially over last year. Gross margins advanced by
over 2%.
EBITDA improved to 4.8% from negative. This led to profit from
operations of GBP408k (GBP220k loss). After finance charges &
tax, profit stood at GBP234k. A negative exchange difference of
GBP230k leaves a net profit of GBP4k (GBP1,098k loss).
The move into profit was accompanied by a net increase in cash
of GBP240k.
Repayments of the EBRD loan have commenced on schedule.
Outlook
The turnaround to a profit & related positive cash flow is
encouraging. UPG has needed to reset its business in a competitive
market place. This is a continuing process. UPG will seek to
sustain operational improvement via a strategy of focusing on cash
production, operating efficiency & building profitable sales
with a competitive product/service offering.
***
For further information contact:
Ukrproduct Group Ltd Tel: +380 44 232 9602
Jack Rowell, Non-Executive Chairman www.ukrproduct.com
Alexander Slipchuk, Chief Executive Officer
ZAI Corporate Finance Ltd Tel: +44 20 7060 2220
Nominated Adviser and Broker www.zaicf.com
John Treacy
This announcement contains information which was previously
inside information for the purposes of
Article 7 of the Market Abuse Regulation EU Regulation
596/2014.
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 total assets of
approximately GBP 13.0 million as at December 31, 2016 and
consolidated revenues of approximately GBP 20.2 million for the
twelve months ended December 31, 2016. 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.
The information contained within this announcement is considered
to be inside information prior to its release as defined in Article
7 of the Market Abuse Regulation No. 596-2014 and is disclosed in
accordance with the Company`s obligations under Article 17 of those
Regulations
UKRPRODUCT GROUP LIMITED
UNAUDITED CONDENSED CONSOLIDATED INCOME STATEMENT
FOR THE PERIODED 30 JUNE 2017 AND 2016
(in thousand GBP, unless otherwise stated)
==================================================================
Six months Six months
ended ended
30 June 30 June
2017 2016
GBP '000 GBP '000
Revenue 14 910 8 192
including of branded and SMP
products 13 637 7 642
Cost of sales (13 216) (7 436)
----------- -----------
Gross profit 1 694 756
Administrative expenses (482) (388)
Selling and distribution expenses (716) (554)
Other operating income/ expenses,
net (88) (34)
----------- -----------
Profit from operations 408 (220)
Finance expense, net (220) (512)
Effect of foreign currency
translation (230) (346)
----------- -----------
Profit before taxation (42) (1 078)
Income tax expense 46 (20)
----------- -----------
Profit for the Six months 4 (1 098)
Attributable to:
Equity holders of the Parent 4 (1 098)
Non-controlling interest - -
----------- -----------
4 (1 098)
Earnings per share:
Basic 0,01 (2,77)
Diluted 0,01 (2,77)
UKRPRODUCT GROUP LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
FOR THE PERIODED 30 JUNE 2017 AND 2016
(in thousand GBP,
unless otherwise stated)
============================== =========== ===========
Six months Six months
ended ended
30 June 30 June
2017 2016
GBP '000 GBP '000
Profit for the Six months 4 (1 098)
Other comprehensive income
Exchange differences on translation
to the presentation currency (226) 233
----------- -----------
Other comprehensive income for the
Six months, net of tax (226) 233
----------- -----------
Total comprehensive income for the
Six months, net of tax (222) (865)
Attributable to:
Equity holders of the Parent (222) (865)
Non-controlling interests - -
----------- -----------
(222) (865)
UKRPRODUCT GROUP LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2017 AND 31 DECEMBER 2016 AND 30 JUNE 2016
(in thousand GBP, unless
otherwise stated)
============================ === =========== ===========
As at As at
30 June 31
2017 December
2016
GBP '000 GBP '000
ASSETS
Non-current assets
Property, plant and equipment 7 166 7 511
Intangible assets 592 656
Deferred tax assets 1 -
Total non-current assets 7 759 8 167
----------- -----------
Current assets
Inventories 2 375 1 855
Trade and other receivables 2 779 2 507
Current taxes 473 230
Other financial assets 32 18
Cash and cash equivalents 237 175
Total current assets 5 896 4 785
----------- -----------
TOTAL ASSETS 13 655 12 952
=========== ===========
Equity and liabilities
Equity attributable to equity
holders
Share capital 3 967 3 967
Other reserves (6 600) (6 284)
Retained earnings 4 521 4 427
Total equity attributable to
equity holders of the parent 1 888 2 110
----------- -----------
Non-controlling interest - -
----------- -----------
Total equity 1 888 2 110
----------- -----------
Liabilities
Non-Current Liabilities
Bank borrowings 5 815 -
Long-term payables 476 441
Deferred tax liabilities 308 363
Total Non Current Liabilities 6 599 804
----------- -----------
Current Liabilities
Bank borrowings 1 350 7 162
Trade and other payables 3 774 2 854
Current income tax liabilities 16 10
Other taxes payable 28 12
Total Current Liabilities 5 168 10 038
----------- -----------
TOTAL LIABILITIES AND EQUITY 13 655 12 952
=========== ===========
- -
UKRPRODUCT GROUP LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIODED 30 JUNE 2017 AND 2016
(in thousand GBP, unless otherwise stated)
=====================================================================
Six months Six months
ended ended
30 June 2017 30 June 2016
GBP '000 GBP '000
Cash flows from operating
activities
Profit/(Loss) before
taxation for the six months (42) (1 078)
Adjustments for:
Exchange difference 230 346
Depreciation and
amortisation 288 206
Loss of disposal of
non-current assets - 5
Impairment of trade
receivables 5 31
Disposal of subsidiaries - (3)
Impairment of inventories 79 54
Interest income - -
Interest expense 220 512
Increase of inventories (441) (941)
Increase in trade and other
receivables (520) (956)
Increase in trade and other
payables 1 012 2 143
-------------- -------------
Cash generated from
operations 831 319
Interest received - -
Income tax paid (6) (8)
-------------- -------------
Net cash generated by
operating activities 825 311
Cash flows from investing
activities
Payments for property, plant
and equipment (41) (77)
Proceeds from sale of
property, plant and
equipment 1 9
Repayments / (proceeds) from
loans issued (15) (8)
-------------- -------------
Net cash used in investing
activities (55) (76)
Cash flows from financing
activities
Interest paid (185) (182)
Net proceeds / (repayments)
from short term borrowing - (59)
Repayments of investment (176) -
borrowing
-------------- -------------
Net cash used in financing
activities (361) (241)
Net (decrease) / increase in
cash and cash equivalents 409 (6)
-------------- -------------
Effect of exchange rate
changes
on cash and cash
equivalents (348) 190
-------------- -------------
Cash and cash equivalents at
the beginning of the six
months 175 93
Cash and cash equivalents at
the end of the six months 237 277
-------------- -------------
-
UKRPRODUCT GROUP LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIODED 30 JUNE 2017 AND 2016
(in thousand GBP,
unless otherwise stated)
============================ ======== ======== ======== ============ ========= ============
Attributable to equity holders
Share Share Merger Revaluation Retained Translation
capital premium reserve reserve earnings reserve
GBP GBP GBP GBP '000 GBP '000 GBP '000
'000 '000 '000
-------- -------- -------- ------------ --------- ------------
(15
As at 1 January 2016 3 967 4 562 - 4 192 5 654 294)
-------- -------- -------- ------------ --------- ------------
Loss for the six months (1 098)
Other comprehensive
income (2) 235
-------- -------- -------- ------------ --------- ------------
Total comprehensive
income - (2) - - (1 098) 235
============================ ======== ======== ======== ============ ========= ============
Depreciation on revaluation
of non current assets (83) 83
Reduction of revaluation
reserve (7) 7
(15
As at 30 June 2016 3 967 4 560 - 4 102 4 646 059)
============================ ======== ======== ======== ============ ========= ============
Profit for the six
months (386)
Other comprehensive
income 2 278
-------- -------- -------- ------------ --------- ------------
Total comprehensive
income - 2 - - (386) 278
============================ ======== ======== ======== ============ ========= ============
Depreciation on revaluation
of non current assets (165) 165
Reduction of revaluation
reserve (2) 2
(14
As at 31 December 2016 3 967 4 562 - 3 935 4 427 781)
============================ ======== ======== ======== ============ ========= ============
Profit for the six
months 4
Other comprehensive
income 1 - (227)
-------- -------- -------- ------------ --------- ------------
Total comprehensive
income - 1 - - 4 (227)
============================ ======== ======== ======== ============ ========= ============
Depreciation on revaluation
of non current assets (90) 90
Reduction of revaluation - -
reserve
Reclassified equity - -
items
(15
As at 30 June 2017 3 967 4 563 - 3 845 4 521 008)
============================ ======== ======== ======== ============ ========= ============
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 the
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 2016.
The preparation of the unaudited condensed consolidated
financial statements requires management to make judgements,
estimates and assumptions that affect the application of policies
and reported amounts of assets and liabilities, income and
expenses. Actual results may differ from those estimates.
The comparatives for the six months ended 30 June 2016 are
extracted from the Group's consolidated financial statements for
the year ended 31 December 2016. The auditor's report for those
accounts was unqualified, but did include references to an emphasis
of matter in respect of going concern due to the Group incurring a
loss during the year as well as the uncertainty surrounding the
breach of loan agreement convenants with the European Bank for
Reconstruction and Development (the "EBRD") and the maturity of the
external financing arrangements with OTP Bank falling due on 9
September 2017.
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 earned profit of 4 thousand GBP for the six months
ended 30 June 2017. This is primarily due to increasing world
prices for butter and increases in the volume of milk produced.
Despite the negative economic conditions in Ukraine the Group
signed new terms in respect of the loan with EBRD with the loan
being divided into Tranche A, with a maturity date 1 December 2022
and interest being payable at a margin of 5% over EURIBOR per
annum, and Tranche B, with a maturity date 1 December 2024 and
interest being payable at the higher of EURIBOR or 1% per annum
upto 1 December 2022 and at a margin of 5% over EURIBOR per annum
thereafter. Despite loan repayments being made as scheduled, the
Group breached financial covenants as at 30 June 2017. The Board
notified EBRD in advance of covenant breaches of the Loan and EBRD
provided waivers in respect of the breached covenants dated 30 June
2017. The Group has also agreed an extension to the loan agreement
with OTP bank for a further three months with the maturity date
being 8 December 2017. It is management's intention to revise the
terms of this loan prior to this date.
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: increasing volume of export
sales and full production capacity.
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 Six months
ended ended
30 June 2017 30 June 2016
-------------- ------------------------------- -----------------------------
Net (loss) / profit
attributable to
ordinary shareholders,
GBP'000 4 (1 098)
Weighted number of ordinary
shares in
issue 39 673 050 39 673 050
Basic earnings per share,
pence 0,01 (2,77)
Diluted average number of
shares 39 673 050 39 629 619
Diluted earnings per share,
pence 0,01 (2,77)
------------------------------- ------------------------------- -----------------------------
3. Approval of interim financial statements
The unaudited condensed consolidated financial statements were
approved by the board of directors on 29 September 2017. 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
IR LPMATMBITBIR
(END) Dow Jones Newswires
September 28, 2017 11:46 ET (15:46 GMT)
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