Last checked at 30 Apr 2015 07:00
PRESS RELEASE
April 30, 2015, Kyiv, Ukraine
MHP S.A.Pre-close trading update for the first quarter ended 31 March 2014
MHP S.A. (LSE: MHPC) ("MHP" or "The Company"), one of the leading agro-industrial companies in Ukraine, focusing on the production of poultry and the cultivation of grain, announces its pre-close trading update for the three months ended 31 March 2015.
Poultry and Related Operations
Since January 2015 the Vinnytsia poultry farm works at full capacity.
MHP's overall production volumes of chicken meat in Q1 2015 constituted 140,370 tonnes (Q1 2014: 137,270 tonnes).
As usual, the Company's poultry production facilities continued to operate at full capacity during the period.
Poultry | Q1 2015 | Q1 2014 | % change | |
Sales volume, third parties tonnes | 113,640 | 112,270 | 1% | |
Price per 1 kg net VAT, UAH | 25.35 | 15.60 | 63% |
Sales of chicken meat to third parties in Q1 2015 remained almost at the same level and were 113,640 tonnes of chicken meat compared to 112,270 tonnes in Q1 2014. Domestic sales volume increased by 7%.
Export Sales: The Company's continues to implement its strategy of export sales diversification. However, due to the macroeconomic instability in CIS region (resulted in depreciation of local currency in most cases) and instability in some countries in the Middle East market (eg. Iraq), volume of chicken meat export in Q1 2015 decreased by 14% and reached 26,050 tonnes, compared to 30,370 tonnes in Q1 2014.
During the reporting period the Company significantly increased its export sales the EU taking into account the preferential export trade regime with the EU market (zero import duty for 16,000 tonnes of poultry). In Q1 2015 MHP exported poultry meat to around 50 countries of the Middle East, Africa, CIS, Asia and the EU.
Prices: The average chicken meat price through the first quarter of 2014 increased substantially by 63% to UAH25.35 per kg (excluding VAT) as to substantial share of export and depreciation of local currency during the reporting period.
Sunflower Oil Sales
Sunflower Oil | Q1 2015 | Q1 2014 | % change | |
Sales volume, tonnes | 74,765 | 67,520 | 11% | |
Price per 1 tonne, US$ | 793 | 853 | -7% |
In Q1 2015, due to increased production of fodder for chicken, MHP's sales of sunflower oil increased 11% to 74,765 tonnes compared to 67,520 tonnes in Q1 2014. In line with international trend of the commodity prices, average price per 1 tonne of sunflower oil decreased by 7% to US$793 compared to US$853 in Q1 2014.
Grain growing operations
Over 70,000 hectares of land in Ukraine are under the winter crops (winter wheat, rapeseeds and barley), which are around 24% of the land cultivated in the grain growing segment of the Company. Currently, all crops are in good condition. As a result, MHP expects good harvest of winter crops in 2015.
MHP's 2015 spring sowing campaign is ongoing now with no significant change in crops.
Other agricultural operations
Meat processing products | Q1 2015 | Q1 2014 | % change | |
Sales volume, third parties tonnes | 5,280 | 6,860 | -23% | |
Price per 1 kg net VAT, UAH | 39.64 | 24.10 | 65% |
Sales volumes of sausage and cooked meat in Q1 2015 decreased substantially to 5,280 tonnes compared to 6,860 tonnes in Q1 2014.
The average sausage and cooked meat price in Q1 2014 increased significantly by 65% to UAH 39.64 per kg (excluding VAT) compared to UAH 24.10 in Q1 2014 mainly due to significant depreciation of local currency.
Next release: Financial results for Q1 2015 will be disclosed on 26 May, 2015.
For investor relations and media enquiries Anastasiia Sobotiuk (Kyiv) |
+38 044 207 00 70 a.sobotyuk@mhp.com.ua |
For analyst enquiries Iryna Bublik (Kyiv) |
+38 044 207 00 04 i.bublik@mhp.com.ua |
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 15 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.