Milkiland preliminary results reveal 44% EBITDA plunge in 2015

Cheese and milk producer Milkiland (MLK PW) reported its preliminary unaudited 2015 results on March 17, revealing a 34% yoy decrease in net revenue to EUR 191 mln. Its Ukrainian subsidiaries suffered from a 55% yoy revenue plunge, mostly as a result of a ban on cheese imports from Ukraine by Russia, which used to be their core business. Milkiland’s Polish subsidiary demonstrated a 48% yoy decline in revenue. The company’s aggregate EBITDA decreased 44% yoy to EUR 9.6 mln.

The company also updated on its debt restructuring, reporting that Deloitte & Touche finalized its business review and a short-term liquidity forecast in December 2015. With these results, the company is continuing its negotiations with key creditors, UniCredit Bank Austria and AO Raiffeisenbank.

Alexander Paraschiy: The preliminary results indicate that revenue at Milkiland’s Russian subsidiaries fell 15% yoy to about EUR 128 mln, now having become the company’s key value generators. What’s encouraging in Milkiland’s report is that it implies the 4Q15 EBITDA was marginally positive, compared to negative EUR 1 mln a year before. This, however, is not very helpful for the company with its end-September debt of EUR 105.5 mln. We still expect Milkiland will be able to find a mutually beneficial solution with its core creditors and will be able to survive as a business.