Milkiland EBITDA marginally increases in 1Q16

Dairy firm Milkiland (MLK PW) reported a 22% yoy decrease in net revenue to EUR 36.5 mln in 1Q16, according to its May 14 filing. Revenue fell in all its countries of operation with the smallest decline, -12% yoy, occurring in Russia (to EUR 24.8 mln). EBITDA at the company’s Russian segment declined 30% yoy to EUR 1.98 mln, still remaining the biggest contributor to the company’s profit. Its Ukraine EBITDA turned positive to EUR 0.38 mln (from negative EUR 0.08 mln) and turned positive in Poland to EUR 0.02 mln for the second time in its history (after 3Q14). Milkiland’s total EBITDA increased 7% yoy to EUR 2.0 mln in 1Q16. Its cash generated from operations advanced 17% yoy to EUR 2.3 mln.

Its net loss halved yoy to EUR 16.4 mln in 1Q16 as its foreign currency loss decreased 61% yoy to EUR 13.2 mln.

The company was able to marginally decrease its total debt to EUR 103.5 mln (-4% qoq, -7% yoy). Its total debt-to-LTM EBITDA ratio increased to 10.4x as of end-1Q16 from 8.1x a year before. Milkiland reported it is still in negotiations with its key lenders, the providers of USD 58.6 mln syndicate loan, to restructure this facility.

Alexander Paraschiy: Some improvement in Milkiland’s EBITDA is a sign the company is heading in the right direction, while that’s still not enough for it to remain a going concern. We are maintaining our cautiously neutral view on Milkiland’s stock.