29 September 2017

Kyiv, Ukraine – September 29, 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.


(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).


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.


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 £250k.


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 £408k (£220k loss). After finance charges & tax, profit stood at £234k. A negative exchange difference of £230k leaves a net profit of £4k (£1,098k loss).

The move into profit was accompanied by a net increase in cash of £240k.

Repayments of the EBRD loan have commenced on schedule.


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                  

Alexander Slipchuk, Chief Executive Officer

ZAI Corporate Finance Ltd                                          Tel: +44 20 7060 2220

Nominated Adviser and Broker                           

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.

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