Shares have been suspended in London-listed Ukraine-focused dairy goods manufacturer Ukrproduct.
The Jersey-headquarter business whose brands include Creamy Valley butter and Molendam cheeses has been hit hard by the Russian invasion of Ukraine and the restrictions on exports to the country and an “18%” hike in milk prices in its markets.
In a trading update the company said it had faced “several global challenges” and stated that there had been an “acute, ongoing shortage of dairy raw materials”.
The group said that rising costs of “energy and transport” had also created additional problems for the business.
Revenue at the company last year was £51.9 million, 6.4% less than in the previous year. Net profit was £300,000 compared to a £1.2 million loss in 2020.
Ukrproduct said that despite the difficult global environment and “limited marketing activities”, it had exceeded its expectations in sales of branded dairy products last year, achieving 11% growth in the Ukraine domestic market compared to the previous year.
The company said: “Trading in 2022 has been severely affected by the Russian invasion of Ukraine and the ongoing war.
“Ten out of twenty four Ukranian regions have experienced heavy military damage and overall, these ten regions supply 42% of raw milk in Ukraine. Moreover, damaged infrastructure, and increases in fuel prices complemented with fuel shortages, have impacted transportation and adversely affected logistics costs, both on the supply and distribution side.
“As the Ukrainian sea ports have been blockaded by the Russian Navy, there is increased pressure on the remaining routes for export.”
Ukrproduct said it would make “provisions” for some of its distributors who operate in the regions engaged in military activities and cannot pay invoices on time.