TIDMUKR
RNS Number : 6389J
Ukrproduct Group Ltd
29 June 2017
FOR IMMEDIATE RELEASE June 29 2017
FINAL RESULTS
ANNUAL REPORT FOR THE YEARED 31 DECEMBER 2016
NOTICE OF AGM
Ukrproduct Group Limited (AIM: UKR), one of the leading
Ukrainian producers and distributors of branded dairy foods and
beverages (kvass) today announces its audited results for the year
ended 31 December 2016.
Copies of the Group's annual report and accounts, incorporating
the 2016 Audited Financial Statements, will shortly be posted to
shareholders and will be available on the Company's website at
www.ukrproduct.com. Copies will also be available from the
Company's head office, 10th Floor, 39-14 Shota Rustaveli St., Kiev
01033, Ukraine.
The Directors of UKR are also pleased to announce that the
notice of Annual General Meeting ("AGM") will shortly be posted to
shareholders. The AGM will be held at the offices of Ukrproduct
Group Ltd, 10th Floor, 39-41 Shota Rustaveli Street, 01033 Kyiv,
Ukraine at 6 pm (Kyiv time) on Thursday, 20 July 2017. Copies of
the Notice of AGM and Proxy Form will be available for download on
the Company website at www.ukrproduct.com.
A copy of the AGM Notice together with further information with
regard to the AGM and other related issues will shortly be
available on Ukproduct's website www.ukrproduct.com , as well as by
request at the following address: Bedell Secretaries Limited,
Secretary, 26 New Street St. Helier, Jersey JE2 3RA Channel
Islands.
For further information contact:
Ukrproduct Group Ltd
Jack Rowell, Non-Executive Chairman Tel: +380 44 232 9602
Alexander Slipchuk, Chief Executive www.ukrproduct.com
Officer
ZAI Corporate Finance Ltd.
Nominated Adviser and Broker Tel: +44 20 7060 2220
Peter Trevelyan-Clark, John Treacy www.zaicf.com
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.
Chairman and Chief Executive Statement
During 2016 Ukrproduct has continued to face the headwinds
induced by the political situation and the Ukrainian economy.
Currency weakness continued with a contracted geographic market
place and intense competition. Consumers are low in spending power
and confidence.
In this challenging context Ukrproduct's response is to focus on
cash; ensure the product offering is competitive; focus on viable
customers affording acceptable margins and thereby cash production.
Ukrproduct seeks further to underpin the trading effort with
cost/productivity improvements.
Trading
Overall revenues increased by only 3% in hryvna terms given
product mix. Gross margins improved in most product lines apart
from skimmed milk powder (SMP).
Branded products were given more focus with key categories
butter and spreads showing improved volume and margins. Margins on
processed cheese were maintained on slightly lower revenues.
Private label made improved gross profits on significantly reduced
volumes as marginal contracts were terminated. Those retained and
developed reflected the quality demanded by the retailer and
commensurate margins. The kvass beverage continued to make a strong
gross profit contribution. This category offers opportunities and
the product offering has been extended with white kvass and healthy
rosehip drinks being test marketed.
The exchange rate depreciation has facilitated good overall
development of the export business not least to CIS countries.
Towards the end of the year, growth of domestic dairy prices in the
Ukraine provided some constraint, however exports of branded
products increased by one thousand tons in 2016.
Skimmed milk powder has been a negative in terms of available
prices being historically low across the world, particularly in the
first half of the year. Spare capacity at our Starokonstantyniv
facility has however afforded opportunities for profitable contract
processing. In this regard in 2016 Ukrproduct maintained its
approved supplier status with Danone, a major international
company, confirming that the company's products meet high
international quality requirements.
Finances
Total revenues for year were stable at GBP20m. In local currency
terms Hryvna revenues overall grew by 3% to UAH 693m.
In difficult markets gross margins generally showed some
improvement subject to SMP which given global pricing showed a
shortfall of GBP0.6m year on year. Note however that SMP is a
by-product of butter production & the net profitability of
butter/SMP together is healthy.
Given significant cost reductions EBITDA moved into positive
territory at 1.9% (2015 minus 4%). The operating loss was sizeably
reduced to GBP0.195m (2015 - operating loss GBP1.346m).
Interest charges fell by GBP145,000 given husbandry of cash
& the restructuring of EBRD debt.
Though reduced, exchange differences continued to be negative at
GBP0.743m (2015 - GBP1.733m). This, together with significantly
reduced other operating expenses of GBP0.17m (2015 - GBP1.089m),
resulted in a loss for the year of GBP1.484m (2015 - loss
GBP3.906m).
Cash
The balance of cash at 31st December 2016 stood at GBP175,000
(2015 GBP93,000). In the challenging trading environment Ukrproduct
group's business model gives a firm focus to cash management.
The Group's cash levels are currently expected to be sufficient
to meet current debt levels in the short & medium term, given
the deferral of the OTP Bank principal repayment announced in
June.
Restructuring of the EBRD loan was finalised in 2016. The
revised terms require the loan to be repaid over a longer period
& at more favourable interest rates and the first two capital
repayments were made as scheduled after the period end. Discussions
however continue with EBRD, as discussed more fully in the Going
Concern section, following financial loan ratio covenant breaches
and subsequent waivers.
Outlook
Ukrproduct will continue to work towards profitability with cash
flow remaining the priority. Plans as defined above will continue
to be implemented with due emphasis on growth opportunities in
Beverages & Export.
The new year has started encouragingly. Sales revenues &
gross margins are ahead of last year at this stage and the first
two tranches of capital repayments to EBRD have been made. A
capital reorganisation to simplify the group structure is being
implemented as required by EBRD.
Ukrproduct Group
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 31 DECEMBER 2016
(in thousand GBP, unless otherwise stated)
==========================================================================================================
Note year ended year ended
31 December 2016 31 December 2015
GBP '000 GBP '000
----------------------------- -----------------------------
Revenue 8 20,190 20,158
Cost of sales 9 (18,071) (17,844)
----------------------------- -----------------------------
GROSS PROFIT 2,119 2,314
Administrative expenses 9 (930) (1,109)
Selling and distribution expenses 9 (1,367) (1,462)
Other operating expenses 9 (17) (1,089)
----------------------------- -----------------------------
LOSS FROM OPERATIONS (195) (1,346)
Net finance expenses 11 (623) (768)
Foreign exchange loss, net 10 (743) (1,733)
----------------------------- -----------------------------
LOSS BEFORE TAXATION (1,561) (3,847)
Income tax expenses 13 77 (59)
============================= =============================
LOSS FOR THE YEAR (1,484) (3,906)
Attributable to:
Owners of the Parent (1,484) (3,906)
Non-controlling interests - -
Earnings per share (pence): 26
Basic (3.74) 9,85
Diluted (3.74) 9,91
OTHER COMPREHENSIVE INCOME:
Items that may be subsequently
reclassified to profit or loss
Currency translation differences 513 (1,526)
----------------------------- -----------------------------
Items that will not be reclassified to
profit or loss
Gain on revaluation of property, plant
and equipment - 1,113
Income tax in respect of revaluation
reserve - (200)
OTHER COMPREHENSIVE INCOME, NET OF TAX 513 (613)
----------------------------- -----------------------------
TOTAL COMPREHENSIVE INCOME FOR THE YEAR (971) (4,519)
============================= =============================
Attributable to:
Owners of the Parent (971) (4,519)
Non-controlling interests - -
Ukrproduct Group
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 December 2016
(in thousand GBP, unless otherwise stated)
==========================================================================================================
Note As at As at
31 December 2016 31 December 2015
GBP '000 GBP '000
----------------------------- -----------------------------
ASSETS
Non-current assets
Property, plant and equipment 14 7,511 7,417
Intangible assets 15 656 596
Deferred tax assets 16 - 46
8,167 8,059
----------------------------- -----------------------------
Current assets
Inventories 17 1,855 1,496
Trade and other receivables 18 2,507 1,486
Current taxes 19 230 348
Other financial assets 20 18 11
Cash and cash equivalents 21 175 93
4,785 3,434
----------------------------- -----------------------------
TOTAL ASSETS 12,952 11,493
============================= =============================
EQUITY AND LIABILITIES
Equity attributable to owners of
the parent
Share capital 22 3,967 3,967
Share premium 23 4,562 4,562
Translation reserve 23 (14,781) (15,294)
Revaluation reserve 23 3,935 4,192
Retained earnings 4,427 5,655
2,110 3,082
Non-controlling interests - -
TOTAL EQUITY 2,110 3,082
----------------------------- -----------------------------
Non-Current Liabilities
Bank loans 24 - 3,206
Long-term payables 441 -
Deferred tax liabilities 16 363 466
804 3,672
----------------------------- -----------------------------
Current liabilities
Bank loans 24 7,162 3,121
Trade and other payables 25 2,854 1,586
Current income tax liabilities 10 18
Other taxes payable 12 14
10,038 4,739
----------------------------- -----------------------------
TOTAL LIABILITIES 10,842 8,411
----------------------------- -----------------------------
TOTAL EQUITY AND LIABILITIES 12,952 11,493
============================= =============================
Ukrproduct Group
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
AS AT 31 December 2016
(in thousand GBP, unless otherwise stated)
========================================================================================== ========= ===========================
Attributable to owners of the parent Non-controlling Total
interests Equity
Share Share Revaluation Retained Translation Total
capital premium reserve earnings reserve
GBP GBP GBP '000 GBP '000 GBP '001 GBP '000 GBP '000 GBP '000
'000 '000
-------- -------- ------------ --------- ------------ --------- ---------------- ---------
As At 1 January 2015 3,967 4,562 3,453 9,358 (13,768) 7,572 - 7,572
-------- -------- ------------ --------- ------------ --------- ---------------- ---------
Loss for the year - - - (3,906) - (3,906) - (3,906)
Other comprehensive income
Gain on revaluation of
property, plant and
equipment - - 913 - - 913 - 913
Currency translation
differences - - - - (1,526) (1,526) - (1,526)
-------- -------- ------------ --------- ------------ --------- ---------------- ---------
Total comprehensive income - - 913 (3,906) (1,526) (4,519) - (4,519)
======== ======== ============ ========= ============ ========= ================ =========
Depreciation on revaluation
of property, plant and
equipment - - (86) 86 - - - -
Reduction of revaluation
reserve - - (88) 116 - 28 - 28
As At 31 December 2015 3,967 4,562 4,192 5,654 (15,294) 3,081 - 3,081
======== ======== ============ ========= ============ ========= ================ =========
Loss for the year - - - (1,484) - (1,484) - (1,484)
Other comprehensive income
Currency translation
differences - - - - 513 513 - 513
Total comprehensive income - - - (1,484) 513 (971) - (971)
======== ======== ============ ========= ============ ========= ================ =========
Depreciation on revaluation
of property, plant and
equipment - - (248) 248 - - - -
Reduction of revaluation
reserve - - (9) 9 - - - -
As At 31 December 2016 3,967 4,562 3,935 4,427 (14,781) 2,110 - 2,110
======== ======== ============ ========= ============ ========= ================ =========
Ukrproduct Group
CONSOLIDATED STATEMENT OF CASH FLOWS
AS AT 31 December 2016
(in thousand GBP, unless otherwise stated)
===========================================================================
Note year year ended
ended
31 31 December
December 2015
2016
GBP '000 GBP '000
--------- ------------
Cash flows from operating
activities
Loss before taxation (1,561) (3,847)
Adjustments for:
Exchange difference 10 743 1,733
Depreciation and amortisation 9 589 537
Loss/(Profit) on disposal
of non-current assets 9 25 (4)
Write off of receivables/payables 32 857
Impairment of inventories 9 120 78
Loss from disposal of subsidiaries (3) (3)
Interest income 11 (1) (1)
Interest expense on bank loans 11 624 769
--------- ------------
Operation cash flow before
working capital changes 568 119
(Increase) in inventories (472) (127)
(Increase) / decrease in trade
and other receivables (933) 890
Increase / (decrease) in trade
and other payables 1,122 (404)
--------- ------------
Changes in working capital (283) 359
Cash generated from operations 285 478
Interest received 1 1
Income tax paid (32) 169
--------- ------------
Net cash generated by / (used
in) operating activities 254 648
Cash flows from investing
activities
Purchases of property, plant
and equipment and intangible
assets (217) (259)
Proceeds from sale of property,
plant and equipment 17 18
Repayments of loans issued (11) 66
--------- ------------
Net cash used in investing
activities (211) (175)
Cash flows from financing
activities
Interest paid (372) (607)
(Decrease) / increase in short
term borrowing (63) (76)
Net cash generated by financing
activities (435) (683)
--------- ------------
Net decrease in cash and cash
equivalents (392) (210)
Effect of exchange rate changes
on cash and cash equivalents 474 88
Cash and cash equivalents
at the beginning of the year 93 215
Cash and cash equivalents
at the end of the year 21 175 93
These consolidated financial statements were approved and
authorised for issue by the Board of Directors on June 29, 2017 and
were signed on its behalf by Alexander Slipchuk.
Nature of Financial Information
The financial information contained in this announcement does
not constitute statutory accounts as defined under section 113 of
the Companies (Jersey) Law 1991 but has been extracted from the
Group's 2016 statutory financial statements. The auditors have
reported on the 2016 financial statements: their report was
unqualified but did contain an emphasis of matter paragraph in
respect of going concern and non-observance of the terms of the
loan agreement with the European Bank of Reconstruction and
Development (EBRD) as well as the maturity of external financing
arrangements with OTP Bank on 9 September 2017. It contained no
statement under section 113B of the Companies (Jersey) Law 2011.
The financial statements for 2016 will be delivered to the
Registrar of Companies after adoption at the Company's Annual
General Meeting.
EXTRACTS FROM NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of preparation
The consolidated financial statements have been prepared on a
historical cost basis, except for property, plant and equipment
which have been measured at fair value. The consolidated financial
statements are presented in British Pounds Sterling (GBP) and all
values are rounded to the nearest thousand (GBP000) except where
otherwise indicated
2. Going concern, Bank loans and overdrafts
The Group incurred a loss of GBP 1,484 thousand for the year
ended 31 December 2016, decreasing retained earnings at that date
to GBP 4,427 thousand. In addition, due to significant devaluation
of Ukrainian Hryvnia the principal amounts of loans denominated in
foreign currencies has increased. As at 31 December 2016 loans,
denominated in foreign currency, had the following amount
outstanding: GBP 969 thousand owing to OTP Bank and GBP 6,193
thousand owing to EBRD (Note 24). Interest under these loan
agreements is paid according to a fixed schedule annexed to the
relevant loan agreement.
An amended Loan Agreement and Restatement Deed with the EBRD was
signed in June 2016 and details announced on 30 June 2016 with the
new terms becoming effective on 24 October 2016. As per the new
terms, the principal amount is divided into two parts - Tranche A
in the amount of 4,000 thousand EUR with a maturity date of 01
December 2022 and Tranche B in the amount of 3,259 thousand EUR
with a maturity date of 30 November 2024.
The Group gained a capital repayment holiday until 01 March 2017
with quarterly capital repayments on Tranche A commencing on that
date and increasing in amount on an annual basis until 1 December
2022. The first two payments have been made in full as scheduled.
Tranche B is ordinarily due for repayment in a single bullet
payment on 1 December 2024 assuming no early repayment of Tranche A
or events of default.
Despite the repayments being made as scheduled, the Group
breached financial covenants as at 31 December 2016 and 31 March
2017. The Board notified EBRD in advance of covenant breaches of
the Loan and EBRD provided waivers in respect of the breached
covenants dated 08 May 2017 and 24 May 2017 respectively. Due to
the fact that the date of the waivers receipt was later than the
reporting date, under IAS 1 Presentation of Financial Statements
the Group was required to classify the EBRD loan in full as a
current liability. In the consolidated statement of financial
position the current liabilities exceed current assets due to the
EBRD loan reclassification.
The Board believes that EBRD will not demand accelerated
repayment of the loan due to the breach of the covenants as at 31
December 2016 and as at 31 March 2017. Going forward if the Group
anticipates a breach of the financial ratio covenants under the
amended EBRD loan agreement it is expected that EBRD would grant a
waiver in advance of the reporting period deadline.
The Group has entered into a variation of the loan agreement
with OTP Bank under which the principal loan repayment date has
been extended from 9 June 2017 to 9 September 2017. The principal
amount outstanding under this agreement is Ukrainian Hryvnia UAH
32,300 thousand (approximately GBP 969 thousand).
The 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: reconstruction of
manufacturing facilities in Starokonstantinov operation, reducing
the number of subsidiaries and streamlining business processes to
minimise non-value adding activities and related costs, and by
development of its export capacity.
The political and economic situation has become less volatile
than in 2015. The government of Ukraine is aiming at rapprochement
with the European Union with many reforms being carried out in
various fields.
The Group's strategic goal is the development of export sales in
world markets, in particular Asia and Africa. CIS markets also
remain strategically important markets for the Group to develop and
sales into Kazakhstan have commenced.
The Group is also looking to expand our domestic sales in
Ukraine driven in part by the introduction of new products and the
renewal of the existing product portfolio. The Group continues to
increase volumes throughput in its dairies through close
cooperation with farmers and cooperatives, thereby increasing the
capacity utilization.
As at 31 December 2016 the Group has two loans: a loan from OTP
Bank in the amount of 969 thousand GBP with a maturity date of 09
September 2017 and EBRD in the amount of 6,193 thousand GBP (in EUR
7,259 thousand) . As at 31 December 2016, the Group has
restructured the loan with the European Bank for Reconstruction and
Development (EBRD) for the financing of a project to increase
energy efficiency and productivity of the Starokonstantinovskiy
Molochniy Zavod SC plant.
Guarantees, corporate rights in pledge under EBRD facility
agreement are the enterprises of the Group that are jointly and
severally responsible together with the borrower: Molochnik LLC;
Milk Investments Private Enterprise SC; Starkon-Moloko LLC;
Ukrproduct Group CJSC; Zhiviy Kvas LLC.
Guarantees under OTP bank facility agreement are the enterprises
of the Group that are jointly and severally responsible together
with the borrower: Avtopark Starokonstantinov LLS;
Favorit-Konsulting Private Enterprise; Invest Garantiya Private
Enterprise; Krasilovsky Molochny Zavod Private Enterprise SC; ATP
Centr LLC; Ukrproduct Group CJSC
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SEEFIUFWSEEM
(END) Dow Jones Newswires
June 29, 2017 11:24 ET (15:24 GMT)
Ukrproduct (AQSE:UKR.GB)
Gráfico Histórico do Ativo
De Dez 2024 até Jan 2025
Ukrproduct (AQSE:UKR.GB)
Gráfico Histórico do Ativo
De Jan 2024 até Jan 2025