Ukrproduct released 2011 annual report on April 25, 2012 with company’s net profits dropping over 60% yoy down to GBP 400 K from GBP 1.09 M. EBITDA fell 29% down to GBP 1.86 M as sales have grown 12% similar to Milkiland’s number. Also similar to Milkiland’ s case company blamed rising prices for milk and energy costs. Sergey Evlanchik, CEO of Ukrproduct, said the trading environment has remained "challenging" with "unemployment accentuating the squeeze" on consumer disposable incomes. Stock market reacted immediately with 9.16% drop in company’s price per share.

AgroInvest comment: Ukrainian agro holdings involved in production of dairy products and milk faced the situation when they could not deal comprehensively with rising prices. Milkiland reacted immediately by expanding its vertical integration and increasing count of milking cows by two times. Ukrproduct, unlike Milkiland will have a very rough 2012 as unlike Milkiland, which already managed to attract USD 100 M in 2012 for development and expansion, Ukrproduct does not have free funds available to compete with Milkiland’s growing capacities. Given those facts investors immediately realized loos of the company’s value, hence price per share dropped.

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