**Summary of Ukrproduct Group Limiteds Interim Results for H1 2025**
**Overview**
Ukrproduct Group Limited, a leading Ukrainian producer and distributor of branded dairy foods and beverages, reported its unaudited interim financial results for the six months ended 30 June 2025. Despite operating in a challenging environment due to the ongoing war in Ukraine, the Group demonstrated resilience, achieving revenue growth of 32.9% in local currency (UAH) and 21.6% in British pounds (GBP).
**Key Financial Highlights**
**Revenue Growth**Revenue increased to £20.2 million in H1 2025 from £16.6 million in H1 2024, driven by inflation-related price adjustments and higher export volumes.
**Product Performance**
Processed cheese sales grew 4.7% to £11.2 million.
Butter sales surged to £3.3 millionprimarily due to expanded exports.
Spreads sales rose to £2.0 millionmainly from higher export volumes.
Skimmed milk powder sales increased to £0.8 million, reflecting strong EU demand.
Kvass and beverages sales dipped slightly to £1.0 million due to a cooler summer, but Kombucha sales are accelerating.
Sunflower seeds sales jumped 720% to £0.2 million, supported by higher tonnage.
**Profitability**Gross profit remained flat at £3.5 million as cost increases offset revenue gains. EBITDA declined 18.3% to £1.5 million due to higher operating expenses.
**Net Loss**The Group recorded a net loss after tax of £0.2 million, compared to a profit of £0.9 million in H1 2024, impacted by foreign exchange losses and finance costs.
**Operational Challenges**
The Group continues to operate under air-raid alerts, logistics disruptions, and intermittent power constraints due to the war.
Workforce challenges persist, with younger workers relocating abroad or unavailable due to mobilisation.
Periodic strikes on energy infrastructure have increased operational complexity and costs.
**Financial Position**
Net assets decreased to £1.6 million as of 30 June 2025, down from £4.9 million in H1 2024.
Cash balances were reduced to £0.1 million, reflecting liquidity constraints.
The Group remains in breach of certain provisions of its loan agreement with the European Bank for Reconstruction and Development (EBRD), with ongoing restructuring discussions.
**Outlook**
The operating environment is expected to remain fragile, with the war and financial constraints continuing to impact the Group.
Export growth has benefited from EU market access, but any tightening of safeguards or re-imposition of quotas could reduce volumes and prices.
The Group is focusing on mitigating actions, including product mix optimisation, export diversification, and disciplined working capital management.
Liquidity remains constrained, dependent on lender forbearance and restructuring discussions with the EBRD.
**Going Concern**
The Directors acknowledge material uncertainties due to the war and financial pressures but have a reasonable expectation that the Group has adequate resources to continue operations for the foreseeable future. The financial statements are prepared on a going concern basis.
**Subsequent Events**
The war continues, with intensified strikes on energy and rail infrastructure increasing operational risks.
The Ukrainian government has allowed men aged 18-22 to leave the country, potentially impacting workforce retention.
Restructuring discussions with the EBRD remain active, with no formal agreement reached as of the reporting date.
**Conclusion**
Ukrproduct Group demonstrated resilience in H1 2025 despite significant operational and financial challenges. While revenue growth was achieved, profitability was impacted by rising costs and foreign exchange losses. The Group’s liquidity remains constrained, and its ability to continue as a going concern depends on successful restructuring and continued lender forbearance. The outlook for 2025 remains uncertain, with the war and financial pressures posing ongoing risks.