Ukrproduct : 2019-Final results and notice of AGM_Final, 27.06.2019

27 June 2019

UKRPRODUCT GROUP LIMITED

("Ukrproduct", the "Company" or, together with its subsidiaries, the

"Group")

FINAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2018

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 2018.

Copies of the 2018 Annual Report and Accounts, will shortly be posted to shareholders and will be available on the Company's website at www.ukrproduct.com. In addition, a Notice of Annual General Meeting ("AGM"), along with a Proxy Form, will shortly be posted to shareholders and will be available at the Company's website at www.ukrproduct.com.

The AGM will be held at the head office of the Company, 10th Floor, 39-41 Shota Rustaveli Street, 01033 Kyiv, Ukraine at 6.00 pm (Kyiv time) / 4.00 pm (London time) on 30 July 2019.

For further information contact:
Ukrproduct Group Ltd
Jack Rowell, Non-Executive Chairman	Tel: [phone]
Alexander Slipchuk, Chief Executive Officer	www.ukrproduct.com
Strand Hanson Limited
Nominated Adviser and Broker	Tel: [phone]
Rory Murphy, James Dance, Jack Botros	www.strandhanson.co.uk

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 current 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. Ukrproduct's securities are traded under the symbol "UKR" on AIM, a market operated by the London Stock Exchange.

Chairman and Chief Executive's Statement

Trading

During the year to 31 December 2018 ("FY 2018"), the Ukrainian economy showed moderate growth, accompanied by wage inflation, which has helped consumer confidence. Ukrproduct Group Ltd ("Ukrproduct", the "Company" or, together with its subsidiaries, "the Group") continued focusing on cash generation while aiming to address opportunities in export markets, beverages and B2B, as well as expanding its dairy business.

The Group reports improved revenue of approximately £36,9 million (approximately 1.3 billion UAH). Gross profit in UAH terms increased 4.3% to approximately 115 million UAH, however, in GBP terms, the negative impact of exchange rate differences resulted in a decrease of 2.5% to approximately £3.2 million.

The Group reports an operating profit of approximately £0.2 million (approximately UAH 6.2 million) in FY2018, compared with an operating profit of approximately £0.5 million (approximately UAH 16.2 million) in 2017.

Overall, for FY 2018, the Company reports net profit of approximately £0.1 million (approximately 2.7 million UAH) compared to a loss of approximately £1.1 million (approximately 40.6 million UAH) in 2017. Net profit for 2018 is lower than previously expected (as announced on 7 May 2019) as a result of increased operating expenses. Net profit for FY2018 included lower finance charges related to the outstanding debt with EBRD, although total finance expenses increased to approximately £0.5 million (approximately 16.2 million UAH) from approximately £0.4 million (approximately 15.1 million UAH) in 2017.

Overall, the Group reports that its sales volumes have grown by 4%, including sales of branded products in its key packaged butter and processed cheese segments. However, both export sales volumes and revenue decreased due to the worldwide contraction of skimmed milk powder prices. Although the Company continued to capitalise on its spare dairy processing capacity by acquiring new B2B partners, Ukrproduct's B2B gross profit slightly decreased in 2018. Whilst gross profit of branded products showed substantial growth, it was unfortunately offset by losses caused by the decline in both skimmed milk powder and butter prices.

Sales of beverages significantly increased as a result of the Group's targeted marketing initiatives and the introduction of new drinks.

Financial Position

As at 31 December 2018, Ukrproduct reports net assets of approximately £1.0 million (approximately

35.13 million UAH) and net current liabilities of approximately £0.03 million (approximately 1.05 million UAH), with cash balances of approximately £0.2 million (approximately 6.4 million UAH). During FY 2018, the Group met its outstanding obligations, including the EBRD loan repayments, which were paid on schedule in the amount of €0.52 million.

Outlook

Ukrproduct's strategy going forward is to generate cash by improving the profitability of its key dairy product and beverage segments and to further enhance its working capital position.

The Group expects to boost its sales volume and revenue in 2019 by launching new products in its key business areas, introducing new marketing activities and capitalising further on export opportunities.

Jack Rowell	Alexander Slipchuk
Non-Executive Chairman	Chief Executive Officer

Ukrproduct Group

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2018

(in thousand GBP, unless otherwise stated)

Revenue

Cost of sales

GROSS PROFIT

Administrative expenses

Selling and distribution expenses

Other operating expenses

PROFIT FROM OPERATIONS Net finance expenses

Net foreign exchange gain (loss)

PROFIT / (LOSS) BEFORE TAXATION

Income tax expense

PROFIT / (LOSS) FOR THE YEAR Attributable to:

Year ended

31 December 2018

• '000

36 928

(33 751)

3 177 (1 061) (1 799) (131)

186

(494)

398

90

-

90

Year ended

31 December 2017

• '000

30 525

(27 267)

3 258 (1 031) (1 561) (156)

510

(437)

(1 250)

(1 177)

62

(1 115)

Owners of the Parent	90	(1 115)
Non-controlling interests	-	-
Earnings per share:
Basic (pence)	0,23	(2,81)
Diluted (pence)	0,23	(2,81)
OTHER COMPREHENSIVE INCOME:
Items that may be subsequently reclassified to profit or loss
Currency translation differences	(8)	(113)
Items that will not be reclassified to profit or loss
Gain on revaluation of property, plant and equipment	-	-
Income tax in respect of revaluation reserve	-		-
OTHER COMPREHENSIVE INCOME, NET OF TAX	(8)		(113)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR	82	(1 228)
Attributable to:
Owners of the Parent	82	(1 228)
Non-controlling interests	-	-

Ukrproduct Group

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 December 2018

(in thousand GBP, unless otherwise stated)

		As at		As at
		31 December		31 December
	2018	2017
		£ '000		£ '000
ASSETS
Non-current assets
Property, plant and equipment	6 420	6 288
Intangible assets		524		543
	6 944	6 831
Current assets
Inventories	3 735	2 426
Trade and other receivables	3 156	2 171
Current taxes	349	271
Other financial assets	24	30
Cash and cash equivalents		181		496
		7 445		5 394
TOTAL ASSETS	14 389	12 225
EQUITY AND LIABILITIES
Equity attributable to owners of the parent
Share capital	3 967	3 967
Share premium	4 562	4 562
Translation reserve	(14 902)	(14 894)
Revaluation reserve	3 619	3 769
Retained earnings		3 718		3 478
	964	882
Non-controlling interests		-		-
TOTAL EQUITY	964	882
Non-Current Liabilities
Bank loans	5 208	5 716
Long-term payables	467	459
Deferred tax liabilities		274		262
	5 949	6 437
Current liabilities
Bank loans	2 455	1 318
Trade and other payables	5 008	3 565
Other taxes payable	13	23
		7 476		4 906
TOTAL LIABILITIES		13 425		11 343
TOTAL EQUITY AND LIABILITIES		14 389		12 225