April 29 (SeeNews) - Croatian food and pharmaceuticals producer Podravka [ZSE:PODR] said on Friday its net profit declined to 88.8 million kuna ($12.3 million/11.7 million euro) in the first quarter of 2022 from 105.2 million kuna in the same period last year, due to the impact of the war in Ukraine on its business.
“Earnings before interest, taxes, depreciation, and amortisation (EBITDA) in this period was lower by 7.7%, and net profits down by 15.6% in comparison to 2021, as a direct consequence of the effects of the Ukraine crisis on operations, largely due to stopped deliveries and the negative currency exchange differences,” it said in a filing to the Zagreb bourse.
EBITDA fell to 170.3 million kuna, while sales revenue increased 8.6% on the year to 1.173 billion in the period from January to March.
Podravka's revenue rose by 91.6 million kuna, or 10.8% on the year, in the food segment, and by 1.3 million kuna (0.6%) in the the pharmaceutical segment.
“Though the war in Ukraine and sanctions against Russia have had a significant impact on revenues and profits in the pharmaceutical segment, certain negative impacts have also been seen in the food segment,” Podravka said.
Growing prices of energy, raw materials and other materials caused by the pandemic and further spurred by the Ukraine crisis, have created additional pressures on the increase of production costs in the food segment.
In comparison to the end of the first quarter of 2021, the stock price of natural gas has increased five-fold, wheat by 67%, oil by 65%, tin packaging by 56%, and powdered milk by 60%.
The overall negative impact of the growth of raw materials and other materials on the group's operations was estimated at 41.8 million kuna in the first quarter.
“Therefore, the company will continue to further optimise costs and increase business efficacy in order to mitigate the rising costs through internal reserves to the greatest extent possible,” it added.
Podravka's shares traded flat at 610 kuna on the Zagreb bourse on Friday afternoon.
(1 euro=7.565 Croatian kuna)