The Podravka Group earned HRK 2.4 billion in sales revenue in the first half of 2022, which is an increase of 8.8% compared with the same period in 2021, while net profit fell by 1.3% to HRK 195.4 million, the food processing and pharmaceutical group reported on Friday.

It said that following a sharp rise in prices of raw materials in the second half of 2021, developments surrounding the war in Ukraine had caused further increases in prices of raw materials, materials and energy, adversely affecting its business both in the Food segment and in the Pharmaceuticals segment.

In the first half of 2022, the costs of raw materials increased by 21.6%, and restricted access to the Russian and Ukrainian markets further adversely affected the profitability of the Pharmaceuticals segment.

The sharp rise in prices of raw materials and energy is expected to have a significant impact on the group’s business in the second half of the year as well, Podravka said in its financial statement.

Despite the growing inflation, the average net monthly wage for Podravka employees was 14% higher than in June 2021, which is more than the national average wage growth rate of 8.2%, CEO Martina Dalic said in the statement, adding that this marked the continued increase in investment in workers’ wages, which reached HRK 35 million this year.

Podravka said it would continue to invest in strategic projects, including the modernisation and introduction of new product lines, increasing energy efficiency and improving work conditions.