Analysts consider Milkiland a risky investment

Analysts regard Milkiland company as a risky investment. Alexander Paraschiy, Head of Research at Concorde Capital, commented on company's financial results for Q1 2018.

"Recovery of the company’s operating activity has stopped as Milkiland reportedly focused on improving its margins," he notes.

Improvement of Milkiland's EBITDA margin was only observed in Russia, while its Ukrainian and Polish assets are performing worse.

"It looks like the company has decided to rely more on external factors (beneficial input and output prices) rather than its management efforts to produce and sell more, which is a very risky approach for a heavily indebted company," Alexander Paraschiy stresses.

Reference: Milkiland's net profit for the three months of 2018 accounted for EUR 2.4 million compared to net profit of EUR 1.1 million in Q1 2017. Revenue in Q1 2018 declined 19% y-o-y to EUR 30.1 million on the back of the decrease of the Group’s output (-39% y-o-y). The non-cash foreign exchange gains totaled EUR 4.6 million (compared to zero in Q1 2017).

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