Last checked at 17 Jul 2012 07:02
PRESS RELEASE
July 17, 2012, Kyiv, Ukraine
MHP S.A.Pre-close trading update for the second quarter and first half of 2012
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, today announces its pre-close trading update for the second quarter and the first six months of the year ending 30 June 2012.
Poultry and Poultry Related Operations
As usual during the first half of 2012 MHP worked at maximum utilization of current poultry production capacities. Both poultry production volumes and sales in H1 2012 compared to H1 2011 remained unaltered.
Poultry | Q2 2012 | Q2 2011 | % change | H1 2012 | H1 2011 | % change | |
Sales volume, third parties tonnes | 96,560 | 97,800 | -1% | 181,600 | 182,100 | 0% | |
Price per 1 kg net VAT | 17.48 | 13.97 | 25% | 17.14 | 13.44 | 28% |
During the first six months of 2012 third parties sales constituted 181,600 tonnes of poultry. During the second quarter of 2012, the volume of chicken meat sales to external consumers constituted 96,560 tonnes and remained almost at the same level for compared volumes for the same period in 2011. Demand for chicken meat during the first half of 2012 remained high and the Company was able to sell close to 100% of the chicken produced.
Due to the favorable market environment in Ukraine and seasonal trend, the average chicken meat price in Q2 2012 increased by 4% compared to Q1 2012. At the same time the average price in the second quarter of 2012 increased by 25% to UAH 17.48 per kg of adjusted weight (excluding VAT) when compared to second quarter of 2011. As a result of a stable and strong poultry prices during the first two quarters of 2012, the difference between H1 2011 and H1 2012 chicken meat prices constituted 28%, which is an increase from UAH 13.44 per kg to UAH 17.14 per kg.
During the second quarter of 2012 the volume of exported chicken meat sales continued the growing dynamics of previous quarters, exploring new business opportunities in the countries of Africa. It resulted in around 30% growth in H1 2012 compared to the same period last year, which is almost 20,000 tonnes of frozen chicken export.
The Company continues to open new business directions for chicken export sales.
Sunflower Oil | Q2 2012 | Q2 2011 | % change | H1 2012 | H1 2011 | % change | |
Volume, tonnes | 49,191 | 38,600 | 27% | 94,749 | 84,500 | 12% | |
Price, US$/t | 1,131 | 1,301 | -13% | 1,109 | 1,303 | -15% |
In Q2 2012, 49,191 tonnes of sunflower oil were sold mainly for export at an average price of US$ 1,131 per tonne, which was 13% lower in price compared to Q2 2011 (US$ 1,301 per tonne) in line with world market trends. In H1 2012, 94,749 tonnes of sunflower oil were sold at an average price of US$ 1,109 per tonne, which was 15% lower in price compared to H1 2011 (US$ 1,303 per tonne).
Grain Growing Operations
In 2012 the Company is 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 remains relatively stable at around 280,000 hectares.
During the reporting periods of 2012 the Company continued to sell crops from 2011 harvest, which resulted in:
Q2 2012
| H1 2012
| ||||||
Volume, tonnes
| Price, US$/t
| Volume, tonnes
| Price, US$/t
|
| |||
Corn | 116,000 | 234.0 | 198,000 | 230.0 |
| ||
Wheat | 15,800 | 181.0 | 34,800 | 184.0 |
| ||
Soybean | 11,200 | 455.0 | 17,000 | 435.0 |
| ||
The Company recently started harvesting wheat, rapeseeds and barley. Despite concerns over weather conditions in Ukraine and taking into account challenging situation with harvest in the USA and Russia, we expect our yields to be good enough and significantly higher than Ukraine's average, due to our operational efficiency and employment of best practice.
The Company has just started to conclude forward export contracts for several crops from 2012 harvest.
Other Agricultural Operations
Meat processing products | Q2 2012 | Q2 2011 | % change | H1 2012 | H1 2011 | % change |
Sales volume, tonnes | 9,010 | 9,400 | -4% | 16,510 | 17,300 | -5% |
Price per 1 kg net VAT | 22.07 | 19.50 | 13% | 21.83 | 18.91 | 15% |
In the second quarter of 2012, sausage and cooked meat production volumes slightly decreased by 4% to 9,010 tonnes compared to 9,400 tonnes in the second quarter of 2011. In the first half of 2012 sausage and cooked meat production volumes also decreased by 5% to 16,510 tonnes compared to 17,300 tonnes in H1 2011 due to the continuous product mix optimization.
Average sausage and cooked meat prices during the second quarter of 2012 increased by 13% to UAH 22.07 per kg excluding VAT (Q2 2011: UAH 19.50 per kg). In H1 2012 average prices increased by 15% from UAH 18.91 per kg excluding VAT to UAH 21.83 per kg excluding VAT.
MHP is a market leader in meat processing in Ukraine and management expects the Company's market share to increase further. More than 50% of the raw materials required by the Company's meat processing operations are internally produced chicken meat.
Vinnytsia - expansion project
MHP's new green field Vinnytsia project is being constructed to schedule and in line with the investment plans. To follow the progress on the site please visit: http://www.mhp.com.ua/en/node/1082/.
The financial results for the second quarter and first six months of 2012 will be published on August 29, 2012. There will be a conference call for investors and analysts on the day that will take place at 4pm Kyiv time (2 pm London/5 pm Moscow). Dialing instructions for the call will be published in a due course.
For investor relations enquiries:
MHP Anastasia Sobotiuk (Kyiv)
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Kiev: +380 44 207 99 58 a.sobotyuk@mhp.com.ua |
Notes to Editors:
About MHP
MHP was admitted to the Official List of the London Stock Exchange in May 2008. It is the leading producer of poultry products in Ukraine, with a 2011 market share for industrially produced chicken meat of approximately 50%, according to the State Committee on Statistics of Ukraine. It's "Nasha Ryaba" brand is the market leader with 98% of brand recognition, whilst MHP also has several other national and regional brands for processed meat products.
MHP is fully vertically integrated owning and operating 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 bio-security and to control the quality of its inputs and the resulting quality and consistency of its products through to the point of sale.
MHP also has an important and expanding grain operation, producing and selling sunflower oil as a by-product of its fodder production. MHP also produces and sells sausages, cooked meats convenience food products, goose meat, foie gras, beef and fruit.