Mhp Reg S Regulatory News (MHPC)

15 Apr 2009 07:00



PRESS RELEASE

April 15, 2009, Kyiv, Ukraine 

MHP S.A.Trading update for the first quarter ended 31 March 2009

MHP S.A. (LSE: MHPC) ("MHP" or "The Company"), one of the leading agro-industrial companies inUkraine, focusing on the production of poultry and the cultivation of grain, is pleased to announce today its trading update for the first quarter ended 31 march 2009.

Poultry and Poultry Related Operations

During the first three months of 2009 consumer demand for chicken meat remained high and all company's production facilities continued to work at full capacity. Production of chicken during the first quarter 2009 remained stable compared to the first quarter 2008 however chicken sales to third parties decreased by 8% to 50,459 tonnes (Q1 2008: 54,830 tonnes). This decrease in sales to third parties resulted from converting greater volumes of chicken meat into production of value added products and increase in intercompany sales accordingly.

Average chicken meat prices through the first quarter of 2009 increased by 8.8% to 11.43 UAH per kg. of adjusted weight (excluding VAT) when compared to the first quarter of 2008 (Q1 2008: 10.51 UAH). 

MHP's production costs per 1 kg. of poultry meat during the first quarter of 2008 will be lower than in 2008 due to the use of self produced sunflower protein and corn in chicken fodder.

Grain Growing Operations

The Company currently has approximately 180,000 hectares of land under control. 

At this time of the year the company is not able forecast the yields but based on the winter weather conditions and through continued use of modern farming techniques we expect it to be higher than Ukraine's average.

The Company has already purchased all required seeds and fertilizers for the 2009 spring campaign, which is already on the way, and is planning to cultivate 178,000 hectares or almost 100% of its leased agricultural land. 

Other Agricultural Operations

During the first three month of 2009, sausage and cooked meat production volumes increased by 103% to 4,945 tonnes compared to 2,442 tonnes during the first quarter of 2009 this growth was due to the acquisition of the new meat processing facilities of "Ukrainian Bacon" in July 2008. Approximately 50% of all meat used in production of the sausages is chicken.

Average sausage and cooked meat prices during the first quarter of 2009 decreased by 4.1% to 17.48 UAH per kg excluding VAT (Q1 2008: 18.22 UAH per kg.). The decrease was primarily due to the fact that Ukrainian Bacon products are positioned in mass market segment. 

MHP's Q1 2008 financial results will be published in June 2009. The exact publication date and dialing instructions for the call will be published in due course.

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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 2008 market share for industrially produced chicken meat of approximately 39%, according to the State Committee on Statistics of Ukraine. It's "Nasha Ryaba" brand is the market leader, 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 beef, sausages, cooked meats convenience food products, goose meat, foie gras and fruit.