Ukrainian dairy producer Ukrproduct has downgraded its expectations for 2011 profits in a trading update released today (23 December).

The company described the forecast as "disappointing" and said profitability was undermined by the increase in fuel costs, "very high" milk price inflation and competition.

It said: "As a result of these factors, the company now expects that before and after tax profits for the current financial year ending31 December 2011 will be below previous expectations."

Ukrproduct said it will continue its planned growth in sales and reduce costs, stating: "All these programmes are underway and the outlook is for significant improvement in 2012."

However, there were positives in the update, such as a projected 10% rise in revenue, a 1.1% market share jump in butter and a 0.7% jump in processed cheese market share.

The company also announced the appointment of Vyacheslav Osypenko to the position of director of the production department. It will announce its full-year results in April.

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