Ukrproduct estimates sales rose 10% yoy in 2011

Ukrproduct (UKR LN) said it expects revenues to grow 10% yoy in 2011 (from GBP 45.0 mln last year), the company reported in a trading update on Friday. The company estimated it strengthened its share in the Ukrainian butter market from 6.8% in 2010 to 7.9% in 2011 and in the domestic processed cheese market from 14.0% in 2010 to 14.7% in 2011. The company said profitability was undermined by the high cost of raw milk and growing fuel prices, but did not provide any further details. Yegor Samusenko: The news looks encouraging for Ukrproduct, which has not seen a value triggers for the last three years – if the company’s guidance proves correct, this will be the largest yoy growth in the company’s top line since 2007. Another positive trigger could come in 2012 – we expect Ukrproduct’s profitability, which was hurt by cancellation of the VAT subsidy on milk purchases in 2011, to benefit from partial return of the benefit in 2012, just like with Milkiland (refer to our Milkiland note dated December 23, 2011 for details).