REG - Ukrproduct Group Ltd - Interim Results
30/09/2025 07:00
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RNS Number : 2954B Ukrproduct Group Ltd 30 September 2025
30 September 2025
UKRPRODUCT GROUP LIMITED
("Ukrproduct", the "Company" or, together with its subsidiaries, the "Group")
UNAUDITED INTERIM FINANCIAL RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2025
Ukrproduct Group Limited (AIM: UKR), one of the leading Ukrainian producers
and distributors of branded dairy foods and beverages (kvass), today announces
its unaudited interim financial results for the six months ended 30 June 2025.
The full unaudited interim financial results for the six months ended 30 June
2025 are available on the Company's website at www.ukrproduct.com.
For further information contact:
Ukrproduct Group Limited
Rinat Abdrasilov, Non-Executive Chairman Tel: +44 1534 507000
Oleksandr Slipchuk, Chief Executive Officer www.ukrproduct.com (http://www.ukrproduct.com/)
Strand Hanson Limited
Nominated Adviser and Broker Tel: +44 20 7409 3494
Rory Murphy, Richard Johnson, Imogen Ellis www.strandhanson.co.uk (http://www.strandhanson.co.uk/)
Chairman and Chief Executive Statement
Before we turn to the results for the 6 months to 30 June 2025 ("1H 2025" or
the "Period"), the Company would like to recognise everyone who made them
possible. Firstly, we thank our team across our factories and offices in
Ukraine. Throughout the six months ended 30 June 2025 you kept plants running
despite air-raid alerts, intermittent power and disrupted routes. We remember
colleagues and family members we have lost, and we know some of our people
have seen their homes severely damaged or destroyed. You worked under missile
threats, learned first-aid, covered for teammates who were mobilised or
relocated, and kept delivering despite every adversity. Your professionalism,
courage and care for one another kept essential foods moving to customers and
communities. These results are yours.
Secondly, we thank our partners - farmers, drivers, distributors and retail
networks - for standing with us when inputs were scarce and lead times
stretched. Your trust, flexibility and problem-solving helped us keep shelves
supplied and customers served.
Thirdly, we appreciate the European Bank for Reconstruction and Development
("EBRD")'s continued engagement as we work towards a practical restructuring
that preserves continuity for employees, farmers and customers. We value the
collaborative, solutions-focused dialogue and look forward to an outcome
aligned with the EBRD's publicly stated commitments in Ukraine - supporting
food security, export capacity and jobs during wartime - while remaining fair,
bankable and timely for all parties.
Finally, above all, we thank all those who defend Ukraine. Your service makes
any progress possible.
Ukrproduct, one of the leading Ukrainian producers and distributors of branded
dairy foods and beverages, announces its interim results for 1H 2025 and
provides an outlook for the remainder of 2025.
2025 Half-Year Highlights
Ukrproduct Group demonstrated solid resilience in a challenging environment,
achieving revenue growth of 32.9% in local currency (UAH) during 1H 2025. This
performance was primarily driven by inflation-related price adjustments and
higher export volumes. Revenue reported in British pounds rose 21.6%, from
£16.6 million in 1H 2024 to £20.2 million in 1H 2025. The lower sterling
growth rate reflects the significant and ongoing depreciation of the Ukrainian
hryvnia (UAH).
· Processed cheese and processed cheese products: Sales grew 4.7%
year-on-year to £11.2 million (1H 2024: £10.7 million).
· Butter: Sales increased sharply to £3.3 million (1H 2024: £1.3
million), primarily due to expanded packaged butter exports. Domestic sales
were deliberately scaled back to avoid unprofitable transactions, with sales
in Ukraine limited to selected clients.
· Spreads: Sales rose to £2.0 million (1H 2024: £1.7 million), mainly
on higher export volumes.
· Skimmed milk powder and skimmed milk product: Sales increased to £0.8
million (1H 2024: £0.5 million), reflecting strong EU demand at favourable
prices. However, the possible withdrawal of duty- and quota-free access under
the EU's Autonomous Trade Measures (and any revision to quotas) may
significantly reduce future export volumes.
· Sandwich spreads: This category remains stable, with sales of £0.6
million.
· Kvass and beverages: Sales were £1.0 million, slightly down from
£1.1 million in 1H 2024, reflecting weaker kvass demand due to an unusually
cool summer. Conversely, Kombucha sales are accelerating, benefiting from
innovation and lifestyle-driven positioning.
· Sunflower seeds: In 1H 2025, the Group realised sales of sunflower
seeds of £0.2 million, representing a 720% increase year-on-year.
Profitability in this segment was supported by higher tonnage, albeit
undermined by slightly lower market prices.
Operating amid active conflict. Since February 2022, our teams have operated
under air-raid alerts, logistics disruption and intermittent power
constraints. Periodic strikes on energy infrastructure have increased
operating complexity and contingency costs. We continue to prioritise the
safety of our people and continuity of supply to customers, but these
conditions materially affect planning horizons, working capital needs and
production efficiency.
Profitability
· In line with the revenue growth, cost of sales increased by 26.4%
year-on-year to £16.7 million, driven by higher raw material costs and
intensified competition for milk resources.
· Gross profit was £3.5 million (flat year-on-year), as cost
increases offset revenue gains.
· Operating expenses (general & administrative and selling &
distribution) rose 13.5% to £2.3 million, primarily reflecting higher payroll
(inflation and labour scarcity), statutory contributions and retention
incentives. Labour turnover remains elevated as younger workers relocate
abroad or are unavailable due to mobilisation and family dispersal. To protect
throughput, we have focused on targeted retention, cross-training and
selective hiring; however, these measures increase the short-term cost base.
Post-period, the change permitting men aged 18-22 to travel abroad may further
pressure workforce availability, and we are planning additional mitigation as
needed.
· EBITDA declined 18.3% year-on-year to £1.5 million.
· Finance costs in 1H 2025 increased by 35.6% to £0.5 million
compared with 1H 2024, primarily due to the recognition and capitalisation of
deferred interest and fees related to the EBRD loan (c. ˆ2.4 million or £2.1
million), with interest now accruing on the higher principal balance.
· Net foreign-exchange loss widened to £0.9 million (1H 2024: £0.2
million) due to the depreciation of the Ukrainian hryvnia.
As a result, the Group recorded a net loss after tax of £0.2 million,
compared with a profit of £0.9 million in 1H 2024.
Financial position
As at 30 June 2025, Ukrproduct reported net assets of £1.6 million, down from
£4.9 million year over year, with cash balances reduced to £0.1 million (1H
2024: £0.5 million).
For the six months ended 30 June 2025, the Group continued to be in breach of
several provisions of the loan agreement with the EBRD, including failure to
repay Tranches A and B by maturity and missed interest payments since 1 March
2022.
Discussions with the EBRD, initiated in 2021 regarding potential restructuring
of the loan and accrued interest, remain ongoing. At present, the EBRD has not
exercised its right to accelerate repayment of the outstanding loan.
Outlook for 2025
The operating environment is expected to remain fragile, with the war in
Ukraine and financial constraints continuing to weigh on the Group. Our export
growth has benefited from EU market access; however, any tightening of
safeguards or re-imposition of quotas on Ukrainian dairy would reduce volumes
and price realisation, particularly in commodities (e.g., SMP, butter). We are
preparing mitigation actions including mix optimisation towards value-added
products, diversification of export destinations and closer alignment of
production to confirmed orders. The Group's liquidity remains constrained and
dependent on disciplined working-capital management and continued lender
forbearance while restructuring discussions with EBRD are ongoing. We are
limiting capital expenditure to essential safety and maintenance, pursuing
prepayments where possible and rationalising lower-margin stock -and
concentrating on the most profitable product range to preserve cash. The
Group will support further development of recent product launches (kvass
varieties, Kombucha, sandwich spreads), continue to follow a cautious capital
allocation policy, prioritise liquidity preservation, seek new financing
opportunities, and focus on fulfilling its existing obligations.
Rinat Abdrasilov Oleksandr Slipchuk
Non-Executive Chairman Chief Executive Officer
Ukrproduct Group
CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 June 2025
(in thousand GBP, unless otherwise stated)
Note Six months ended Six months ended
30 June 2025 30 June 2024
£ '000 £ '000
Revenue 8 20 232 16 645
Cost of sales (16 701) (13 211)
GROSS PROFIT 3 531 3 434
Administrative expenses (1 201) (797)
Selling and distribution expenses (1 015) (1 156)
Other operating expenses (97) (10)
PROFIT FROM OPERATIONS 1 218 1 471
Net finance expenses (457) (337)
Net foreign exchange loss (924) (159)
(LOSS) / PROFIT BEFORE TAXATION (163) 975
Income tax expense (27) (78)
(LOSS) / PROFIT FOR THE SIX MONTHS (190) 897
Attributable to:
Owners of the Parent (190) 897
Non-controlling interests - -
Earnings per share from continuing and total operations:
Basic (in pence) 9 (0.48) 2.26
Diluted (in pence) 9 (0.48) 2.26
OTHER COMPREHENSIVE (LOSS)/INCOME:
Items that may be subsequently reclassified to profit or loss
Currency translation differences (143) (489)
OTHER COMPREHENSIVE (LOSS)/INCOME, NET OF TAX (143) (489)
TOTAL COMPREHENSIVE (LOSS)/INCOME FOR THE SIX MONTHS (333) 408
Attributable to:
Owners of the Parent (333) 408
Non-controlling interests - -
Ukrproduct Group
CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION
AS AT 30 June 2025
(in thousand GBP, unless otherwise stated)
Note As at As at As at
30 June 2025 31 December 2024 30 June 2024
£ '000 £ '000 £ '000
ASSETS
Non-current assets
Property, plant and equipment 6 538 6 880 6 964
Intangible assets 266 338 415
6 804 7 218 7 379
Current assets
Inventories 5 4 207 3 522 3 734
Trade and other receivables 6 4 748 4 228 5 124
Current taxes 707 799 680
Other financial assets 26 28 100
Cash and cash equivalents 64 120 474
9 752 8 697 10 112
TOTAL ASSETS 16 556 15 915 17 491
EQUITY AND LIABILITIES
Equity attributable to owners of the parent
Share capital 4 282 4 282 4 282
Treasury shares (315) (315) (315)
Share premium 4 583 4 583 4 562
Translation reserve (16 672) (16 529) (16 475)
Revaluation reserve 5 553 5 628 5 711
Retained earnings 4 209 4 324 7 177
1 640 1 973 4 942
TOTAL EQUITY 1 640 1 973 4 942
Non-current Liabilities
Deferred tax liabilities 285 324 354
285 324 354
Current liabilities
Bank loans 5 752 5 572 5 840
Short-term payables 441 584 438
Trade and other payables 8 370 7 397 5 791
Current income tax liabilities 16 2 12
Other taxes payable 52 63 114
14 631 13 618 12 195
TOTAL LIABILITIES 14 916 13 942 12 549
TOTAL EQUITY AND LIABILITIES 16 556 15 915 17 491
Ukrproduct Group
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 June 2025
(in thousand GBP, unless otherwise stated)
Attributable to owners of the parent
Share capital Treasury shares Share premium Revaluation reserve Retained earnings Translation reserve Total Non-con-trolling interests Total Equity
£ '000 £ '000 £ '000 £ '000 £ '000 £ '000 £ '000 £ '000 £ '000
As at 31 December 2023 4 282 (315) 4 562 5 797 6 194 (15 986) 4 534 - 4 534
Profit for the six months - - - - 897 - 897 - 897
Currency translation differences - - - - - (489) (489) - (489)
Total comprehensive income - - - - 897 (489) 408 - 408
Depreciation on revaluation of property, plant and equipment - - - (86) 86 - - - -
As at 30 June 2024 4 282 (315) 4 562 5 711 7 177 (16 475) 4 942 - 4 942
Loss for the six months - - - - (2 936) - (2 936) - (2 936)
Currency translation differences - - - - - (54) (54) - (54)
Other changes - - 21 - - - 21 - 21
Total comprehensive loss - - 21 - (2 936) (54) (2 969) - (2 969)
Depreciation on revaluation of property, plant and equipment - - - (83) 83 - - - -
As at 31 December 2024 4 282 (315) 4 583 5 628 4 324 (16 529) 1 973 - 1 973
Loss for the six months - - - - (190) - (190) (190)
Currency translation differences - - - - - (143) (143) (143)
Total comprehensive loss - - - - (190) (143) (333) (333)
Depreciation on revaluation of property, plant and equipment - - - (75) 75 - - -
As at 30 June 2025 4 282 (315) 4 583 5 553 4 209 (16 672) 1 640 1 640
Ukrproduct Group
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 June 2025
(in thousand GBP, unless otherwise stated)
Six months ended Six months ended
30 June 2025 30 June 2024
£ '000 £ '000
Cash flows from operating activities
(Loss)/Profit before taxation (162) 975
Adjustments for:
Exchange difference 924 159
Depreciation and amortization 323 310
Loss on disposal of non-current assets - (2)
Provision for/ (Reversal of) bad debt 2 (7)
Impairment of inventories 354 269
Interest income (1) (1)
Interest expense on bank loans 459 339
Operating cash flow before working capital changes 1 899 2 042
Increase in inventories (1 039) (1 220)
(Increase) / (Decrease) in trade and other receivables (435) 82
Decrease in trade and other payables 167 266
Changes in working capital (1 307) (872)
Cash generated from operations 592 1 170
Interest received 1 1
Income tax paid (30) (149)
Net cash generated from operating activities 563 1 022
Cash flows from investing activities
Purchases of property, plant and equipment and intangible assets (454) (465)
Proceeds from sale of property, plant and equipment - 35
Repayments of loans issued - (66)
Net cash used in investing activities (454) (496)
Cash flows from financing activities
Interest paid (55) (139)
Net movement of borrowing - 109
Net cash used in financing activities (55) (30)
Net increase in cash and cash equivalents 54 496
Effect of exchange rate changes on cash and cash equivalents (110) (458)
Cash and cash equivalents at the beginning of the six months 120 436
Cash and cash equivalents at the end of the six months 64 474
Ukrproduct Group
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2025
(in thousand GBP, unless otherwise stated)
EXTRACTS FROM NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of preparation
The unaudited condensed consolidated financial statements have been prepared
in accordance with International Financial Reporting Standards, International
Accounting Standards and Interpretations issued by the International
Accounting Standards Board (IASB), as adopted by the United Kingdom
(collectively "IFRS"). The condensed consolidated financial information in
this half yearly report has been prepared in accordance with International
Accounting Standard 34 'Interim Financial Reporting' (IAS 34), as adopted by
the United Kingdom and the Disclosure Guidance and Transparency Rules of the
Financial Conduct Authority.
2. Going concern
The war in Ukraine continues to pose significant risks to the Group's
operations, including potential infrastructure damage, logistics and energy
disruptions, and workforce shortages due to conscription. Despite management's
forecasts, material uncertainties remain that may cast doubt on the Group's
ability to continue as a going concern.
In addition, the Group continues to operate under financial pressure and
remains in breach of certain provisions of its loan agreement with the EBRD.
As at the date of approval of these interim financial statements, the EBRD has
not exercised its rights to demand immediate repayment or to accelerate the
outstanding balance. Management remains engaged in discussions with the EBRD
regarding a potential restructuring. However, no binding agreement has been
reached, and no assurance can be given as to the timing or outcome of those
discussions, or that forbearance will continue.
The Directors have considered base and downside cash-flow forecasts for a
period of at least twelve months from the date of approval. These forecasts
incorporate feasible mitigating actions within the Group's control, including
disciplined working capital management, cost reductions, deferral of
non-essential capital expenditure, and product mix optimisation. These
forecasts assume no acceleration of the EBRD facility and ongoing access to
key markets and suppliers. In certain downside scenarios, absent a
restructuring or continued forbearance from the EBRD, the Group would require
additional funding and there are no guarantees that this funding will be
available.
Accordingly, the Directors note that a material uncertainty exists which may
cast significant doubt on the Group's ability to continue as a going concern.
Nevertheless, having regard to the actions available to them and to the
current status of discussions with the EBRD, the Directors have a reasonable
expectation that the Group has adequate resources to continue in operational
existence for the foreseeable future and, therefore, the interim financial
statements have been prepared on a going concern basis. The interim financial
statements do not include any adjustments that would result if the Group were
unable to continue as a going concern.
Ukrproduct Group
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2025
(in thousand GBP, unless otherwise stated)
Management acknowledges that future development of military actions and their
duration represent a source of material uncertainty which may cast significant
doubt about the Group's ability to continue as a going concern and, therefore,
the Group may be unable to realize its assets and discharge its liabilities in
the normal course of business. Despite the material uncertainty relating to
the war in Ukraine, management is continuing to take actions to minimize the
impact to the Group and thus believes that the application of the going
concern assumption for the preparation of these consolidated financial
statements is appropriate.
3. Foreign currency translation
Functional and presentation currency
Items included in the financial statements of each of the Group's companies
are measured using the currency of the primary economic environment in which
the company operates ("the functional currency"). For the companies operating
in Cyprus and British Virgin Islands, the functional currency is United States
Dollars ("USD"). For the Parent company, which is located in Jersey, the
functional currency is Pound Sterling ("GBP"). For the companies operating in
Ukraine, the functional currency is Ukrainian Hryvnia ("UAH").
These condensed consolidated interim financial statements are presented in the
thousands of Pound Sterling ("GBP"), unless otherwise indicated.
Foreign currency transactions and balances
Transactions in foreign currencies are initially recorded by the Group
entities at their respective functional currency rates prevailing at the date
of the transaction.
Monetary assets and liabilities denominated in foreign currencies are
retranslated at the functional currency spot rate of exchange ruling at the
reporting date.
Non-monetary items that are measured in terms of historical cost in a foreign
currency are translated using the exchange rates as at the dates of the
initial transactions. Non-monetary items measured at fair value in a foreign
currency are translated using the exchange rates at the date when the fair
value is determined.
The principal exchange rates used in the preparation of these condensed
consolidated interim financial statements are as follows:
Currency 30 June 2025 Average rate for the six months ended 31 December 2024 30 June 2024 Average rate for the six months ended
30 June 2025
30 June 2024
(spot rate) (spot rate) (spot rate)
UAH/GBP 57,20 53,98 52,95 51,24 49,35
UAH/USD 41,64 41,63 42,04 40,54 39,01
UAH/EUR 48,78 45,47 43,93 43,35 42,19
Ukrproduct Group
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2025
(in thousand GBP, unless otherwise stated)
4. Subsequent events
As of the date of this report, the war is ongoing in Ukraine. The Group
continues to operate. The Group retains control over all of its operations.
Since period end, the Ukrainian government has allowed men aged 18-22 to leave
the country during martial law. While the Group's workforce spans all ages and
roles, certain shop-floor and logistics positions have historically included
many younger men, which may increase retention and recruitment risk in H2
2025. Since early September 2025, the frequency and scale of strikes on energy
and rail infrastructure have intensified, increasing operational disruption
risk, lead-time variability and contingency costs.
On 16 July 2025, Rinat Abdrasilov, the Non-Executive Chairman of the Board of
Directors, acquired 100,000 ordinary shares of 10 pence each in the Company at
a price of 5.364 pence per share. Following this transaction, Mr. Abdrasilov
holds an interest in 100,000 ordinary shares, representing approximately 0.25%
of the Company's issued ordinary share capital. The Board (excluding Mr.
Abdrasilov) has assessed the implications of this transaction; see Note 7* for
the related party disclosure and independence assessment.
As of the date of approval of these consolidated financial statements, the
Group remains in active negotiations with the EBRD regarding the restructuring
of its outstanding loan obligations. While no formal agreement has been
reached as of the reporting date, the EBRD has not taken steps to accelerate
repayment of the accumulated loan.
There were no other material events after the end of the reporting date, which
have a bearing on the understanding of the condensed consolidated interim
financial statements.
* Note 7 is presented in the financial report for the six months ended 30 June
2025, which is available on the Company's website
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