Last checked at 18 Apr 2011 07:00
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PRESS RELEASE
April 18, 2011, Kyiv, Ukraine
MHP S.A.Pre-close trading update for the first quarter ended 31 March 2011
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, is pleased to announce its pre-close trading update for the three months ended 31 March 2011.
Poultry and Poultry Related Operations
Poultry | Q1 2011 | Q1 2010 | % change | |
Sales volume, third parties tonnes | 84,300 | 83,000 | 2% | |
Price per 1 kg net VAT, UAH | 12.83 | 12.38 | 4% |
During the first quarter of 2011, the volume of chicken meat sales to third parties increased by 2% compared to the first quarter of 2010, reaching 84,300 tonnes as a result of the production volume increase due to more effective usage of existing capacity. As usual, all the Company's existing poultry production facilities continued to operate at full capacity during the first quarter of 2011. Consumer demand for chicken remained high and the Company was able to sell close to 100% of the chicken meat produced.
The average chicken meat price through the first quarter of 2011 increased by 4% to UAH 12.83 per kg. of adjusted weight (excluding VAT) when compared to Q1 2010, in line with global meat market trends.
Poultry production costs in Q1 2011 rose slightly in UAH terms compared to Q1 2010 due to the increase of grain and utility prices, which was partially compensated by the lower cost of hatching eggs. Since H2 2010, the Company became has been self-sufficient in hatching eggs, compared to Q1 2010 when approximately 25% of hatching eggs had to be imported hatching eggs at extra expense.
In Q1 2011, 45,900 tonnes of sunflower oil were sold mainly for export at an average price of US$ 1,306 per tonne, which was an increase of 54% on Q1 2010 US$ 850.
Grain Growing operations
The Company's winter crops in cultivation on approximately 70,000 hectares are in good condition.
MHP has purchased all seed and fertilizer required for 2011, and is in currently undertaking its spring sowing campaign,
In total, the Company expects to harvest an additional 100,000 hectares in 2011 compared to 2010 in its grain growing segment.
Other Agricultural Operations
Meat processing products | Q1 2011 | Q1 2010 | % change | |
Sales volume, third parties tonnes | 7,900 | 6,200 | 27% | |
Price per 1 kg net VAT, UAH | 18.22 | 16.98 | 7% |
Following further expansion of the Ukrainian Bacon facility, production volumes of sausage and cooked meat increased by 27% to 7,900 tonnes in Q1 2011 compared to 6,200 tonnes in Q1 2010.
The average sausage and cooked meat price for Q1 2011 increased by 7% to UAH 18.22 per kg excluding VAT (Q1 2010: UAH 16.98 per kg.). MHP continues to execute its strategy of increasing the Company's market share in meat processing products, by using internally produced chicken meat.
Financial results for Q1 2011 will be announced on 12 May, 2011.
For further information please contact:
Financial Dynamics Ben Foster (London) Hazel Stevenson (London)
Oleg Leonov (Moscow)
For Investor Relations enquiries Anastasiia Sobotiuk (Kyiv)
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London: +44 20 7831 7176
Moscow: +7 495 795 06 23
Kyiv: +38 044 207 99 58 a.sobotyuk@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 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.