Last checked at 15 Oct 2013 07:09
PRESS RELEASE
October 15, 2013, Kyiv, Ukraine
MHP S.A.Pre-close trading update for the third quarter and nine months of 2013
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 today its pre-close trading update for the third quarter and nine months ended 30 September 2013.
Poultry and Poultry Related Operations
Owing to the increasing production volumes at the Vinnytsia poultry farm, poultry production volumes in Q3 2013 increased by 17% to 122,350 tonnes (Q3 2012: 104,600 tonnes) and in 9M 2013 increased by 18% to 346,940 tonnes (9M 2012: 294,790 tonnes).
Poultry | Q3 2013 | Q3 2012 | % change | 9M 2013 | 9M 2012 | % change | |
Sales volume, third parties tonnes | 120,080 | 93,200 | 29% | 325,430 | 274,800 | 19% | |
Price per 1 kg net VAT, UAH | 16.12 | 17.57 | -8% | 16.21 | 17.29 | -6% |
As a result of an overall increase in poultry production volumes during the third quarter of 2013, sales volume of chicken meat to external consumers constituted 120,080 tonnes, which is 29% higher than in Q3 2012. During the nine months of 2013 third parties sales amounted 325,430 tonnes of poultry, which is 19% higher than in 9M 2012.
Export Sales: Implementing the Company's strategy of export sales growth, during the third quarter of 2013 the volume of chicken meat export was 2.3 times higher the volumes of Q3 2012 and reached around 30,000 tonnes. During the nine months of 2013, poultry export sales were 2.6 times higher the volumes of 9M 2012 and reached 84,780 tonnes. MHP continues to explore new business opportunities in the countries of Asia, Middle East and Africa building-up the export volumes of chicken meat in those regions. In the nearest future the Company's considers an expansion of its export sales in the EU countries.
Prices: Despite the fact that average chicken price in Q3 2013 remained almost at the same level as in Q2 2013, through the nine months of 2013 average chicken prices decreased by 6% to UAH 16.21 per kg of adjusted weight (excluding VAT) when compared to the nine months of 2012 as a result of stable price for fresh chicken in Ukraine and increased export sales of total poultry sales of the Company (frozen chicken meat).
Sunflower Oil | Q3 2013 | Q3 2012 | % change | 9M 2013 | 9M 2012 | % change | |
Volume, tonnes | 64,100 | 52,350 | 22% | 175,260 | 147,100 | 19% | |
Price, US$/t | 1,057 | 1,084 | -3% | 1,097 | 1,100 | - |
As a result of increased production of fodder meal at the Vinnytsia complex, in Q3 2013 MHP sold 64,100 tonnes of sunflower oil, which was 22% higher than in Q3 2012, mainly for export. The average price of US$1,057 per tonne in Q3 2013 was 3% lower than in Q3 2012 (US$1,084 per tonne) in line with world market trends. During 9M 2013, 175,260 tonnes of sunflower oil, which was 19% higher than during 9M 2012. The average price during 9M 2013 remained at the same level as in 9M 2012 (please see table above).
Grain Growing Operations
In 2013 in grain growing operations the Company expects to harvest in Ukraine around 290,000 hectares of land in grain growing segment as well as to cultivate around 30,000 hectares of land in other agricultural operations. The contribution of the newly acquired asset in Russia (40,000 ha) in operational results of 2013 is expected to be very insignificant.
Due to the favorable weather conditions in Ukraine, operational efficiency and employment of best practice, we expect our yields across all crops to be good, stronger than last year and significantly higher than Ukraine's average.
The Company's harvest of late crops (corn and sunflower) is on track. Corn and sunflower yields are in line with MHP's forecast for this year despite challenging weather conditions in the time of harvesting campaign.
The Company is now presenting the results of wheat and rapeseed.
2013* | 2012 | ||||||
Production, tons | Cropped hectares** | Production, tonnes | Cropped hectares* | ||||
Corn | In process | In process | 883,580 | 116,260 | |||
Wheat | 232,670 | 42,530 | 199,900 | 38,960 | |||
Sunflower | In process | In process | 90,620 | 30,570 | |||
Rapeseed | 60,190 | 18,690 | 42,350 | 12,385 | |||
Soya | In process | In process | 24,230 | 13,715 | |||
Other*** | In process | In process | 367,220 | 38,110** | |||
Total: | n/a | n/a | 1,607,900 | 250,000 | |||
*- Harvest from land in Ukraine, excluding Russian asset and land in other agricultural operations
** - Actual hectares under crop and excluding land left fallow as part of crop rotation
*** - Include barley, rye, sugar beet and other
2013 | 2012 | ||||||
MHP's average* | Ukraine's average* | MHP's average* | Ukraine's average* | ||||
Corn | In process | In process | 7.6 | 4.8 | |||
Wheat | 5.5 | 3.5 | 5.1 | 2.8 | |||
Sunflower | In process | In process | 3.0 | 1.7 | |||
Rapeseed | 3.2 | 2.3 | 3.4 | 2.3 | |||
Soya | In process | In process | 1.8 | 1.7 | |||
* - Tonnes per hectare
** - MHP yields are net weight, Ukraine - bunker weight
The Company's corn and sunflower harvesting is ongoing and as of today 35% and 80% is complete accordingly and current yields are around 20% higher than last year.
Other Agricultural Operations
Meat processing products | Q3 2013 | Q3 2012 | % change | 9M 2013 | 9M 2012 | % change | |
Sales volume, third parties tonnes | 9,360 | 10,100 | -7% | 25,470 | 26,610 | -4% | |
Price per 1 kg net VAT, UAH | 24.16 | 22.34 | 8% | 23.34 | 22.02 | 6% |
During the third quarter of 2013, sausage and cooked meat production volumes decreased by 7% to 9,360 tonnes compared to 10,100 tonnes during the third quarter of 2012. During the first nine months of 2013 volumes decreased by 4% to 25,470 tonnes (9M 2012: 26,610 tonnes).
At the same time the average sausage and cooked meat prices during the third quarter of 2013 increased by 8% to UAH 24.16 per kg excluding VAT (Q3 2012: UAH 22.34 per kg) and through the first nine months of 2013 increased by 6% to UAH 23.34 per kg excluding VAT (9M 2012: UAH 22.02 per kg).
MHP continues to lead the market of meat processing products, by using internally produced chicken meat, enhancing its profitability in meat processing business segment.
Next release: The financial results for Q3 and 9M 2013 will be published on November 14, 2013. There will be a conference call for investors and analysts on the day that will take place at 4pm Kyiv time (2 pm London). Dialing instructions for the call will be published in a due course.
For investor relations and media enquiries Anastasiia Sobotiuk (Kyiv)
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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 centers, 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.