JSC Lebedyansky has posted a net loss in its first quarter, compared to a healthy profit in the same period a year earlier.

The Russian company, which earlier this year agreed to sell a majority stake in its juice business to PepsiCo and The Pepsi Bottling Group, said late last week that net losses in the three months to the end of March hit US$5.4m, against a profit of $24.2m a year ago - a drop of 122%. Group sales inched up by 3% to $270m in value terms, with the juice unit delivering a slip in sales of 1% to $230.2m. Lebedyansky's other divisions, baby food and mineral water, saw sales rise by 27% and 46% respectively in the quarter.

Group operating profit also fell sharply, by 62% to $15.9m.

The company blamed a sharp rise in the cost of sales, mainly driven by raw material and packaging price inflation, and an increase in selling, general and administrative costs. Advertising costs also increased, mainly due to more aggressive TV campaigns and BTL motivation programmes in the quarter.

Lebedyansky, which is Russia's juice market leader with 31% share, is set to spin off and sell its juice unit in the third quarter of this year. The $1.4bn transaction involves PepsiCo and PBG acquiring 75.53% of Lebedyansky held by its four largest individual shareholders.