Agriculture
August 30, 2011
Milkiland has reported a 5% YoY increase in its revenue in 1H11 to EUR 127mn, but the rise was not accompanied by any material improvement in margins. Sales in the cheese & butter segment were up by 6% YoY, bringing in EUR 67.7mn. Growth in the whole milk segment was 3% YoY, with revenue reaching EUR 49.4mn in 1H11. The company’s Russian segment is loss-making at the adjusted operating profit level, with the operating profit margin reported at negative 0.5%. The corresponding margin in Ukraine was 19.6%, a 0.6p.p. decline from 1H10. We will initiate the coverage of the MLK stock shortly. However, we can already state that the company’s 2011E P/E of 11.5x looks somewhat on the high side.
