Mhp Reg S Regulatory News (MHPC)

PRESS RELEASE

May 17, 2012, Kyiv, Ukraine

MHP S.A.

Financial Results for the First Quarter of 2012ended March 31, 2012

MHP S.A. ("MHP" or the "Company", LSE ticker: "MHPC"), one of the leading agro-industrial companies in Ukraine, focusing on the production of poultry and the cultivation of grain, today announces its financial results for the first quarter 2012 ended 31 March 2012.

Key operational highlights

Poultry

o During the quarter, consumer demand for chicken remained high; all MHP's poultry production units continued to operate at 100% of capacity and the Company was able to sell close to 100% of the chicken produced.

o Sales volumes of chicken meat to third parties increased by 1% and reached 85,040 tonnes compared to 84,300 tonnes in Q1 2011.

o The average chicken meat sales price to third parties in Q1 2012 increased by 31% to UAH 16.75 per kg of adjusted weight compared to Q1 2011 (UAH 12.83 per kg) and remained at the level of Q4 2011.

o Export sales of chicken in the first quarter of 2012 increased by almost 70% compared to Q1 2011 and constituted around 12% of total sales volumes. The Company continued development of new export sales markets.

Grain Growing

o The Company's winter crops are on approximately 61,000 hectares and are in good condition despite challenging weather conditions during autumn and winter 2011-2012.

o MHP's spring sowing campaign is complete.

o In 2012 the Company expects to harvest around 250,000 hectares of land in grain growing operations and to cultivate around 30,000 hectares of land in other agricultural operations. Total land bank in 2012 will remain relatively stable at around 280,000 hectares.

Other Agricultural

o Sales volumes of processed meat products decreased by 5% to 7,500 tonnes in Q1 2012 compared to Q1 2011 (7,900 tonnes) due to the product mix optimization.

o The average price for sausages and cooked meat in Q1 2012 increased substantially by 18% to UAH 21.53 per kg (excluding VAT) compared to UAH 18.22 in Q1 2011.

Vinnytsia - new green field expansion project

o Construction work on the Vinnytsia project is running to schedule and on budget.

o MHP is planning to launch the project in a "test mode" in June 2012.

Key financial highlights Q1 2012

o Revenue increased by 21% to US$ 298 million (Q1 2011: US$ 247 million).

o EBITDA increased by 48% to US$ 84 million (Q1 2011: US$ 57 million).

o Net income from continuing operations increased by 143% to US$ 48 million (Q1 2011: US$ 20 million).

Commenting on the results, Yuriy Kosiuk, Chief Executive Officer of MHP, said:

"It was a strong start of 2012. We have once again achieved strong revenue and EBITDA growth, whilst at the same time generating sector-leading margins.

Our vertically integrated business model and intensive CAPEX into green field projects clearly differentiates us from our competitors domestically and worldwide, where we control all aspects of our operations: high level of energy efficiency, labor productivity and cost control.

I am also pleased to provide you today with a detailed update on the progress that is being made by now at our new poultry production complex at Vinnytsia. Construction work commenced in May 2010 and is running to schedule and on budget. We are going to launch the Vinnytsia complex in June this year to start trial production.

Looking ahead, demand for our products is high and the overall market environment in Ukraine remains favorable for our business. We are therefore confident that we will be able to continue to implement our strategy and keep on delivering strong financial results."

- end -

MHP's management will host a conference call for investors and analysts followed by a Q&A session. The dial-in details are:

The dial-in details are:

Date: Thursday, 17 May 2012

Time: 16.00 Kyiv / 14.00 London / 9.00 New York / 17.00 Moscow

Title: MHP - Q1 2012 FINANCIAL RESULTS

Conference ID 78615740

The participants will be asked for their full name and conference ID.

UK Standard International +44 (0) 1452 561 488

UK Free Call 0800 073 0438

Russia Free Call 8108 002 434 2044

USA Free Call 1877 328 4999

A live webcast of the presentation will be available at:

https://webconnect.webex.com/webconnect/onstage/g.php?t=a&d=665078443

Alternative URL:

https://webconnect.webex.com/

Click on "Unlisted Events"

Event number: 665 078 443

Event password: N/A

Attendees can login 15 minutes prior to the official start time. Attendees that are having login problems are advised to dial-in to the audio part of the call and ask the Operator to let them speak to the Web Technician.

For further information and Investor Relations enquiries please contact:

Financial overview

* pps - percentage points

Q1 2012 Consolidated Financial Results

Consolidated revenue increased by 21% to US$ 298 million in Q1 2012 in comparison to US$ 247 million in Q1 2011. The main driver of increase in revenue was a substantial growth of chicken prices, while the additional drivers were higher grain prices and volumes sold. Export sales constituted 30% of total revenue in Q1 2012.

EBITDA constituted US$ 84 million, which is by 48% more than in Q1 2011. EBITDA margin increased from 23% in Q1 2011 to 28% in Q1 2012 as a consequence of chicken meat prices growth.

Net income from continuing operations rose by 143% to US$ 48 million (Q1 2011: US$ 20 million), net margin grew from 8% to 16%.

Poultry and related operations

* pps - percentage points

Q1 2012 Poultry and related operations segment financial results

In Q1 2012, chicken meat sales volumes to the third parties on an adjusted-weight basis increased by 1% to 85,040 tonnes (Q1 2011: 84,300 tonnes). As usual all MHP's existing poultry production facilities continued to operate at full capacity.

The average chicken meat sales price increased by 31% to UAH 16.75 per kg of adjusted weight in Q1 2012 compared to Q1 2011. Such positive dynamics of chicken price is a result of low prices in H1 2011, which started to recover since Q3 2011.

Conversely to the poultry price dynamics, the average sunflower oil prices decreased by 17% to US$ 1,085 per tonne in line with world pricing trends.

Consequently, the poultry segment revenue totaled US$ 241 million in Q1 2012, by 15% greater than in Q1 2011.

Poultry production costs increased by around 10% in Q1 2012 compared to Q1 2011, affected mainly by the growth of gas prices since the middle of 2011 and increased expenses for heating rearing sites due to the extremely low temperature during January and February 2012; and higher cost of sunflower protein.

Gross profit in the poultry segment was US$ 77 million in Q1 2012, which is by 46% more than US$ 53 million in Q1 2011, gross profit margin increased from 25% to 32%.

Segment's EBITDA in Q1 2012 increased by 52% to US$ 86 million (Q1 2011: US$ 57 million). EBITDA per 1 kg of chicken meat increased by 50%, EBITDA margin grew from 27% to 36% due to the chicken meat prices growth.

Grain growing operations

Revenue in MHP's grain growing segment in Q1 2012 was generated by the sale of 82,000 tonnes of corn at an average price of US$ 224 per tonne, 19,000 tonnes of wheat at an average price of US$ 186 per tonne, and 5,800 tonnes of soybeans at an average price of US$ 397 per tonne. Consequently, segment's revenue valued US$ 24 million in Q1 2012, which is 268% more than in Q1 2011.

All grain stocks have already been revalued to market prices of 2011, therefore, the segment's EBITDA is equal to almost 0. Due to the harvest cycle, there is a significant seasonality in this division and financial results of the segment are the second half of the year weighted.

In 2012 MHP expects to harvest around 250,000 hectares in grain growing operations, the same with 2011, and to cultivate around 30,000 hectares in other agricultural operations.

Other agricultural operations

In Q1 2012 revenue of other agricultural operations segment increased by 3% to US$ 33 million, mainly due to higher prices meat processing products which increased by 18% to UAH 21.53 per kg excluding VAT in Q1 2012 compared to Q1 2011.

MHP's product mix optimization during Q1 2012 has driven to decrease in sausage and cooked meat production volumes by 5% to 7,500 tonnes compared to Q1 2011. Nevertheless, MHP remained an industry leader with around 10% market share.

The segment's gross profit was US$ 2 million in Q1 2012 (Q1 2011: US$ 3 million). EBITDA amounted to US$ 3 million (Q1 2011: US$ 4 million) and EBITDA margin decreased from 12% in Q1 2011 to 8% in Q1 2012 affected by lower financial result in fruit business.

Current Group financial position, cash flow and liquidity

In Q1 2012, cash flow from operations before working capital changes increased to US$ 102 million (Q1 2011: US$ 63) in line with EBITDA growth.

The total increase in working capital was US$ 48 million in Q1 2012. The main contributors to the change in working capital were inventories and biological assets increase related to spring sowing campaign in grain growing segment and VAT tax recoverable increase related to intensive CAPEX program.

Total CAPEX in Q1 2012 of US$ 101 million was mostly related to the Vinnytsia project. By the end of the first quarter of 2012 the Company invested approximately US$ 450 million into the project since H2 2010, when construction of the Vinnytsia project started.

Vinnytsia - new green field project

Significant progress has already been made with poultry farm, fodder complex and infrastructure at the Vinnytsia site. All equipment required for Phase 1 is already contracted and is being dispatched now.

Poultry Farm

·; Construction of the hatchery is almost complete, installation of the equipment is 90% complete

·; First 7 brigades (chicken rearing zones) with 38 chicken houses in each is almost complete

·; Construction of the next 5 brigades (chicken rearing zones) has started

·; Construction of the slaughter house for Phase 1 (220,000 tonnes of poultry per annum) is almost complete, installation of the equipment is 95% complete

·; Bio purification plant is 90% complete

Fodder Plant and Grain Storage Facilities

·; Construction of Fodder Plant is 70% complete and Sunflower Crushing Plant is 90% complete. Equipment is being installed

Infrastructure and Social

Construction of two independent electric power substations, external transmission network and gas supply is complete. Construction of external water supply (60 km) is 90% complete. Water purifying station of 15,000 m3 capacityis complete. In addition, as part of the facility, MHP will be constructing 45 km of new roads (over 90% complete), 200 new residential apartments, a hostel with a capacity for 800 people and a kindergarten with a capacity for 260 children.

MHP has set up a section on its website dedicated to the Vinnystia project where regular updates will be provided, as well as photographs documenting each stage of the project. Please visit http://www.mhp.com.ua/en/node/1082/ for further information.

Debt Structure

As of the period end, the Company's total debt was US$ 965 million, most of which was denominated in US dollars. The weighted average interest rate comprised approximately 9%. About 60% of total debt is the Eurobond that matures in April 2015.

At the end of Q1 2012, MHP had US$111 million in cash and short term bank deposits. Net debt increased to US$ 854 million, while the Net Debt/EBITDA ratio remained stable about 2.0 as of March 31, 2012 (Eurobond covenant: 2.5).

As a hedge for currency risks, revenue from the export of sunflower oil, sunflower husks and chicken meat are denominated in US Dollars, fully covering debt service expenses. During the first quarter of 2012 MHP received about US$ 90 million from export sales of sunflower oil, chicken meat, grain, and sunflower husks compared to US$ 72 million in Q1 2011.

Outlook

Strong start of the year with a sustainable chicken price dynamics.

Consumer demand for poultry continues to remain high and the Company's production facilities are all operating at full capacity. Following the Company's strategy and objectives, MHP continues to develop export markets in order to establish and/or to build a reliable and a long-term relationship.

In grain growing segment in 2012 we expect good harvest in spite of challenging weather conditions during autumn and winter.

During the following periods MHP's CAPEX program will be mostly related to the construction and the equipment installation on the new Vinnytsia poultry production complex. In the middle of 2012 we plan to commence trial production at Vinnytsia to be ready for a strong start in early 2013.

We are confident that we will be able to continue to implement our strategy and keep on delivering strong financial results cementing our position as one of the leading agri-industrial companies in Ukraine.

- End -

Notes to Editors:

About MHP

MHP is the leading producer of poultry products in Ukraine with the greatest market share and highest brand recognition for its products. MHP owns and operates each of the key stages of chicken production processes, from feed grains and fodder production to egg hatching and grow out to processing, marketing, distribution and sales (including through MHP's franchise outlets). Vertical integration reduces MHP's dependence on suppliers and its exposure to increases in raw material prices. In addition to cost efficiency, vertical integration also allows MHP to maintain strict biosecurity and to control the quality of its inputs and the resulting quality and consistency of its products through to the point of sale. To support its sales, MHP maintains a distribution network consisting of 11 distribution and logistical centres, within major Ukrainian cities. MHP uses its trucks for the distribution of its products, which Management believes reduces overall transportation costs and delivery times.

MHP also has a leading grain cultivation business growing corn to support the vertical integration of its chicken production and increasingly other grains, such as wheat and rape, for sale to third parties. MHP leases agricultural land located primarily in the highly fertile black soil regions of Ukraine.

Since May 15, 2008, MHP has traded on the London Stock Exchange under the ticker symbol MHPC.

Forward-Looking Statements

This press release might contain forward-looking statements that refer to future events or forecast financial indicators for MHP S.A. Such statements do not guarantee that these are actions to be taken by MHP S.A. in the future, and estimates can be inaccurate and uncertain. Actual final indicators and results can considerably differ from those declared in any forward-looking statements. MHP S.A. does not intend to change these statements to reflect actual results.

MHP S.A. AND ITS SUBSIDIARIES

Interim condensed consolidated Financial Statements

For the three-month period ended 31 March 2012

CONTENT

INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME.................................................. 3

INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION.......................................................... 4

INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY......................................................... 5

INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY......................................................... 6

INTERIM CONSOLIDATED CASH FLOW STATEMENTS............................................................................ 7

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS................................. 8

1. Corporate information........................................................................................................................ 8

2. Basis of presentation and accounting policies..................................................................................... 9

3. Segment information....................................................................................................................... 10

4. Profit for the period.......................................................................................................................... 11

5. Property, plant and equipment.......................................................................................................... 11

6. Inventories and agricultural produce.................................................................................................. 11

7. Biological assets............................................................................................................................ 11

8. Bank borrowings............................................................................................................................. 12

9. Bonds issued................................................................................................................................. 13

10. Finance lease obligations.............................................................................................................. 14

11. Trade accounts payable................................................................................................................ 14

12. Related party balances and transactions........................................................................................ 14

13. Contingencies and contractual commitments.................................................................................. 15

14. Currency risk............................................................................................................................... 17

15. Authorization of the consolidated financial statements..................................................................... 18

INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the three-month period ended 31 March 2012

(in thousands of US dollars, unless otherwise indicated)

On behalf of the Board:

Chief Executive Officer Yuriy Kosyuk

Chief Financial Officer Viktoria Kapelyushnaya

The accompanying notes on the pages 8 to 18 form an integral part of these interim condensed consolidated financial statements

INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

as of 31 March 2012

(in thousands of US dollars, unless otherwise indicated)

On behalf of the Board:

Chief Executive Officer Yuriy Kosyuk

Chief Financial Officer Viktoria Kapelyushnaya

The accompanying notes on the pages 8 to 18 form an integral part of these interim condensed consolidated financial statements

INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

for the three-month period ended 31 March 2012

 (in thousands of US dollars, unless otherwise indicated)

On behalf of the Board:

Chief Executive Officer Yuriy Kosyuk

Chief Financial Officer Viktoria Kapelyushnaya

The accompanying notes on the pages 8 to 18 form an integral part of these interim condensed consolidated financial statements

INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

for the three-month period ended 31 March 2011

 (in thousands of US dollars, unless otherwise indicated)

On behalf of the Board:

Chief Executive Officer Yuriy Kosyuk

Chief Financial Officer Viktoria Kapelyushnaya

The accompanying notes on the pages 8 to 18 form an integral part of these interim condensed consolidated financial statements

INTERIM CONSOLIDATED CASH FLOW STATEMENTS

for the three-month period ended 31 March 2012

(in thousands of US dollars, unless otherwise indicated)

On behalf of the Board:

Chief Executive Officer Yuriy Kosyuk

Chief Financial Officer Viktoria Kapelyushnaya

The accompanying notes on the pages 8 to 18 form an integral part of these interim condensed consolidated financial statements

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

for the three-month period ended 31 March 2012

(in thousands of US dollars, unless otherwise indicated)

1. Corporate information

MHP S.A. (the "Parent" or "MHP S.A."), a limited liability company (société anonyme) registered under the laws of Luxembourg, was formed on 30 May 2006. MHP S.A. was formed to serve as the ultimate holding company of PJSC "Myronivsky Hliboproduct" ("MHP") and its subsidiaries. Hereinafter, MHP S.A. and its subsidiaries are referred to as the "MHP S.A. Group" or the "Group". The registered address of MHP S.A. is 5, rue Guillaume Kroll, L-1882 Luxembourg.

The controlling shareholder of MHP S.A. is the Chief Executive Officer of MHP S.A. Mr. Yuriy Kosyuk ("Principal Shareholder"), who owns 100% of the shares of WTI Trading Limited ("WTI"), which is the immediate majority shareholder of MHP S.A.

The principal business activities of the Group are poultry and related operations, grain growing, as well as other agricultural operations (meat processing, cultivation and selling fruits and producing beef and meat products ready for consumption). The Group's poultry and related operations integrate all functions related to the production of chicken, including hatching, fodder manufacturing, raising chickens to marketable age ("grow-out"), processing and marketing of branded chilled products and include the production and sale of chicken products, sunflower oil, mixed fodder and convenience food products. Grain growing comprises the production and sale of grains.  Other agricultural operations comprise the production and sale of cooked meat, sausages, beef, milk, goose meat, foie gras, fruits and feed grains.  During the three month year ended 31 March 2012 the Group employed about 24,800 people (2011: 22,000 people).

The Group has been undertaking a large-scale investment program to expand its poultry and related operations, and in May 2010, commenced construction of the greenfield Vinnytsya poultry complex. During the three month period ended 31 March 2012 construction works at Vinnytsia complex was performed as scheduled.

The primary subsidiaries, the principal activities of the companies forming the Group and the Parent's effective ownership interest as of 31 March 2012 and 31 December 2011 were as follows:

The Group's operational facilities are located in different regions of Ukraine, including Kyiv, Cherkasy, Dnipropetrovsk, Donetsk, Ivano-Frankivsk, Vinnytsya, Kherson, Sumy, Khmelnitsk regions and Autonomous Republic of Crimea.

Notes to the INTERIM CONDENSED Consolidated financial statements

for the three-month period ended 31 March 2012

(in thousands of US dollars, unless otherwise indicated)

2. Basis of presentation and accounting policies

Basis of preparation

The interim condensed consolidated financial statements for the three month period ended 31 March 2012 have been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting.

Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with International Financial Reporting Standards ("IFRS") have been condensed or omitted. However, such information reflects all adjustments (consisting of normal recurring adjustments), which are, in the opinion of the Group management, necessary to fairly state the results of interim periods. Interim results are not necessarily indicative of results to be expected for the full year.

The 31 December 2011 statement of financial position was derived from the audited consolidated financial statements.

Functional and presentation currencies

The functional currency of the Group is the Ukrainian Hryvnia ("UAH"). Transactions in currencies other than the functional currency of the Group are treated as transactions in foreign currencies. Such transactions are initially recorded at the rates of exchange ruling on the dates of the transactions. Monetary assets and liabilities denominated in such currencies are translated at the rates prevailing on the statement of financial position date. All realized and unrealized gains and losses arising on exchange differences are included in the consolidated statement of comprehensive income for the period.

These interim condensed consolidated financial statements are presented in US Dollars ("USD"), which is the Group's presentation currency.

The results and financial position of the Group are translated into the presentation currency using the following procedures:

·; Assets and liabilities for each statement of financial position presented are translated at the closing rate as of the date of that statement of financial position;

·; Income and expenses for each statement of comprehensive income are translated at exchange rates at the dates of the transactions;

·; All resulting exchange differences are recognized as a separate component of equity.

For practical reasons, the Group translates items of income and expenses for each period presented in the financial statements using the quarterly average rates of exchange, if such translations reasonably approximate the results translated at exchange rates prevailing at the dates of the transactions.

The following exchange rates were used:

Significant accounting policies

The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 31 December 2011.

Notes to the INTERIM CONDENSED Consolidated financial statements

for the three-month period ended 31 March 2012

(in thousands of US dollars, unless otherwise indicated)

3. Segment information

The following table presents revenue and profit information regarding the Group's operating segments for the three-month period ended 31 March 2012:

1) Depreciation and amortization attributable to Grain growing segment for the three-months period ended 31 March 2012 in the amount of USD 3,832 thousand was capitalized in work in progress (Note 6);

Depreciation and amortization for the three-month period ended 31 March 2012 includes unallocated depreciation and amortization in the amount of USD 897 thousand.

The following table presents revenue and profit information regarding the Group's operating segments for the three-month period ended 31 March 2011:

1) Depreciation and amortization attributable to Grain growing segment for the three-month period ended 31 March 2011 in the amount of USD 4,200 thousand was capitalized in work in progress (Note 6);

Depreciation and amortization for the three-month period ended 31 March 2011 includes unallocated depreciation and amortization in the amount of USD 804 thousand.

Notes to the INTERIM CONDENSED Consolidated financial statements

for the three-month period ended 31 March 2012

(in thousands of US dollars, unless otherwise indicated)

4. Profit for the period

The Group's profit for the three-month period ended 31 March 2012 increased compared to the three-month period ended 31 March 2011. The principal reason is high returns from poultry and related operations segment, majorly attributable to the higher sales prices on chicken products.

5. Property, plant and equipment

Capital expenditure during the three-month period ended 31 March 2012 related mostly to the construction of Vinnytsya poultry complex. The construction of Vinnytsya poultry complex commenced in 2010 and is being constructed according to the schedule.

During the three-month period ended 31 March 2012, the Group's additions to property, plant and equipment amounted to USD 105,880 thousand (three-month period ended 31 March 2011: USD 55,296 thousand).

There have been no significant disposals of property, plant and equipment during the three-month period ended 31 March 2012.

6. Inventories and agricultural produce

Increase of inventories during the three-month period ended 31 March 2012 is mainly attributable to the increase of work in progress and raw materials balances due to costs incurred by grain growing entities in respect of forthcoming spring sowing campaign.

Agricultural produce balances have decreased as of 31 March 2012 compared to 31 December 2011 mainly due to the internal consumption of corn and grain sales to third parties.

7. Biological assets

Increase of current biological assets balances during the three months ended 31 March 2012 is primarily attributable to crops balances.

The increase in crops balances reflects seasonality element inherent in the grain growing segment.

Notes to the INTERIM CONDENSED Consolidated financial statements

for the three-month period ended 31 March 2012

(in thousands of US dollars, unless otherwise indicated)

8. Bank borrowings

The following table summarizes bank borrowings and credit lines outstanding as of 31 March 2012 and 31 December 2011:

1) WAIR represents the weighted average interest rate on outstanding borrowings.

The Group's borrowings are drawn from various banks as term loans, credit line facilities and overdrafts. Repayment terms of principal amounts of bank borrowings vary from monthly repayment to repayment on maturity depending on the agreement reached with each bank. The interest on the borrowings drawn with the Ukrainian banks is payable on a monthly or quarterly basis. Interest on borrowings drawn with foreign banks is payable semi-annually.

The following table summarizes fixed and floating interest rates bank loans and credit lines held by the Group as of 31 March 2012 and 31 December 2011:

Bank borrowings and credit lines outstanding as of as of 31 March 2012 and 31 December 2011 were repayable as follows:

As of 31 March 2012, the Group had available undrawn facilities of USD 168,849 thousand (31 December 2011: USD 251,315 thousand). These undrawn facilities expire during the period from April 2012 until June 2020.

The Group, as well as, particular subsidiaries of the Group have to comply with certain covenants imposed by the banks providing the loans. The main covenants which are to be complied with by the Group are as follows: total equity to total assets ratio, net debt to EBITDA ratio, EBITDA to interest expenses ratio and current ratio. The Group subsidiaries are also required to obtain approval from lenders regarding the property to be used as collateral.

As of 31 March 2012, the Group had borrowings of USD 42,256 thousand (31 December 2011: USD 52,191 thousand) that were secured. These borrowings were secured by property, plant and equipment with a carrying amount of USD 4,504 thousand (31 December 2011: USD 4,648 thousand) and inventories with a carrying amount of USD 40,276 thousand (31 December 2011: USD 45,491 thousand).

Notes to the INTERIM CONDENSED Consolidated financial statements

for the three-month period ended 31 March 2012

(in thousands of US dollars, unless otherwise indicated)

9. Bonds issued

Bonds issued and outstanding as of 31 March 2012 and 31 December 2011 were as follows:

As of 31 March 2012 amount of accrued interest on bonds issued was USD 25,141 thousand (31 December 2011: USD 10,157 thousand).

10.25% Senior Notes

In November 2006, MHP S.A. issued USD 250 million 10.25% Senior Notes ("Senior Notes"), due in November 2011, at par. The Senior Notes are jointly and severally guaranteed on a senior basis by MHP, Peremoga Nova , Druzhba Narodiv Nova, Oril-Leader, Myronivsky Zavod po Vygotovlennyu Krup i Kombikormiv, Zernoproduct and Druzhba Narodiv. Interest on the Senior Notes is payable semi-annually in arrears. Up to 30 November 2009, the Group had the right to redeem up to 35% of the aggregate principal amount of the Senior Notes with the net proceeds of any offering of MHP S.A. common equity at a redemption price of 110.25% of the principal amount, plus accrued and unpaid interest up to the redemption date. This option was not exercised by the Group.

On 29 April 2010, MHP S.A. issued USD 330,000 thousand 10.25% Senior Notes due in 2015 for an issue price of 101.452% of principal amount.

In addition, as of 13 May 2010 MHP S.A. exchanged 96.01% (USD 240,033 thousand) of USD 250,000 thousand of the existing 10.25% Senior Notes due in 2011 for the new Notes due in 2015. As a result of the exchange, new Senior Notes were issued for the total par value of USD 254,767 thousand.

These Senior Notes are subject to certain restrictive covenants including, but not limited to, limitations on the incurrence of additional indebtedness, restrictions on mergers or consolidations, limitations on liens and dispositions of assets and limitations on transactions with affiliates.

The effective interest rate on the Senior Notes is 11.43% per annum.

The notes are listed on London Stock Exchange.

If the Group fails to comply with the covenants imposed, all outstanding Senior Notes will become due and payable without further action or notice. If a change of control occurs the Group shall make an offer to each holder of the Senior Notes to purchase such Senior Notes at a purchase price in cash in an amount equal to 101% of the principal amount thereof, plus accrued and unpaid interest and additional amounts, if any.

Notes to the INTERIM CONDENSED Consolidated financial statements

for the three-month period ended 31 March 2012

(in thousands of US dollars, unless otherwise indicated)

10. Finance lease obligations

Long-term finance lease obligations represent amounts due under agreements for lease of trucks, agricultural machinery and equipment with Ukrainian and foreign companies. As of 31 March 2012, the weighted average interest rates on finance lease obligations were 8.73% and 7.65% for finance lease obligations denominated in EUR and USD, respectively (31 December 2011: 8.88% and 7.68%).

The following are the minimum lease payments and present value of minimum lease payments under the finance lease agreements as of 31 March 2012 and 31 December 2011: