Sarmat Reports Loss in 2006 of USD 21.75 mln

Sarmat released its 2006 financial results, posting a net loss of USD 21.75 mln (down from USD 0.9 mln in 2005). Sales increased 11.7% yoy to USD 99 mln. In 2007, the company plans to boost beer production to 19 mln dal (+17.8% yoy). Sarmat is controlled by Ukrainian Brewery Holding (UBH) Limited, which is in turn part of System Capital Management (SCM). Olha Pankiv: We believe that the company’s loss is due to concentration on the economy beer segment, which grew by the slowest pace last year, in the midst of strengthening competition and a slow-down in market growth. We expect SCM to sell this non-core business in the near future to a multinational beer producer interested in the 10% of the Ukrainian market currently held by Sarmat and able to correct the company’s strategy.