Milkiland, a dairy group with assets in Ukraine, Russia and Poland, received EUR 11.6 million in net loss in 2019, which is 41.2% less than in 2018.
According to the group’s annual report on the website of the Warsaw Stock Exchange, its revenue fell by 5.2%, to EUR 125.76 million over 2019.
The gross profit of the group compared to 2018 decreased by 15.6%, to EUR 16.46 million. Milkiland increased its operating loss by two times, to EUR 20.44 million in 2019.
The group’s EBITDA decreased by 72.2%, to EUR 585,000, EBITDA margin was 0.5% in 2019 compared to 1.6% in 2018.
The company’s net liabilities decreased by 10.4%, to EUR 76.71 million by the end of 2019. The total assets of the company increased by 17% and as of December 31, 2019, amounted to EUR 177.81 million.
The revenue in the segment of whole milk products decreased by 11%, to EUR 57.64 million in 2019 compared to 2018 (46% of total revenue); in the segment of cheese and butter by 17%, to EUR 42.11 million (33%); in the segment of milk powder and other products increased by 52%, to EUR 26 million (21%).
The Russian market generated 57% of the revenue of Milkiland, the Ukrainian market had 40%, the Polish market had 3% in 2019.
The company said in the statement that in 2019 Milkiland, on the one hand, increased the presence in export markets, on the other, experienced difficulties caused by adverse changes in the macroeconomic situation, as well as the difficult situation in dairy markets in the main countries of operation.
In particular, Milkiland continued its expansion into the Chinese dairy market, supplying dried milk products to this country. The group also supplied kosher dairy products, such as dried milk products and butter, to Israel.
In the dairy market of Ukraine, the company faced rising costs for raw materials amid rising prices for raw milk at farms (8% more on average in 2019 year-over-year). According to the company, this trend, as well as the revaluation of the hryvnia to euro, led to the fact that, as of December 31, 2019, prices for raw milk in Ukraine were 19% higher than in EU compared to the beginning of 2019, which provoked a sharp increase in imports of dairy products (48% year-over-year), primarily from EU to Ukraine.
Milkiland said that imports put pressure on Ukrainian manufactures, especially cheese producers, and many of them were on the verge of zero profitability (cheese imports increased by 73% in 2019, compared to 2018).
Milkiland intends to complete the process of changing registration by the end of August 2020.
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