Milkiland increases revenue 19%, decreases profit 14% in 2013

Ukrainain leading cheese exporter Milkiland (MLK PW) reported a 19% yoy increase in top line to EUR 341 mln in 2013, according to the company’s annual report released today. Revenue increased in each of the company’s three segments, with the most remarkable growth demonstrated in a new segment, Ingredients (+47% yoy to EUR 40 mln). The company’s CEO also highlighted that the company had increased its sales in fresh dairy products by 29% in Russia and 17% in Ukraine, which was well ahead of dairy market growth in these countries, +3-5%. Revenue in the company’s second biggest segment, Whole Milk Products, increased 26% yoy to EUR 144 mln. Its flagship Cheese and Butter segment demonstrated a modest 8% yoy growth in revenue, to EUR 157 mln.

The company’s EBITDA decreased 11% yoy to EUR 33.4 mln in 2013, which the company attributes to the high inflation of raw milk prices. According to the company, average raw milk prices were 17% higher yoy in Russia and 26% higher yoy in Ukraine last year. Higher milk prices mostly affected EBITDA in Milkiland’s Cheese and Butter segment which fell 22% yoy to EUR 19.9 mln. EBITDA increased 10% yoy to EUR 12.2 mln in the company’s Whole Milk Products segment, but the growth was mostly due to much higher sales: EBITDA margin in the segment fell 2pp yoy to 17% in 2013.

The company’s bottom line fell 14% yoy to EUR 11.7 mln in 2013 (EPS amounted to EUR 34.67). The company stated that it is going to “continue a modest dividend payment” this year as well (last year it paid EUR 0.08 in DPS).



Alexander Paraschiy: Despite a tough market and political environment (export limitations to Russia, and the extremely worsened relationship between Russia and Ukraine) the company has managed to deliver good operating and financial results in 2013. However, we believe the stock market will not reward such performance, given that Milkiland is among those foreign-listed Ukrainian stocks that are most exposed to a Russian-Ukrainian crisis (62% of the company’s revenue was generated in the Russian market). At the same time, we believe Milkiland will become the most popular story, should the conflict between Russia and Ukraine de-escalate.

Источник: Конкорд Капитал