MHP Announced Unaudited Financial Results for Q2/H1 2012
OREANDA-NEWS . September 4, 2012. MHP S.A. (“MHP” or the “Company”, LSE ticker: “MHPC”), one of the leading agro-industrial companies in Ukraine, focusing on the production of poultry and the cultivation of grain, today announces its unaudited results for the second quarter and the six months ended 30 June 2012.
Poultry and related operations
o During the first half of the year all the Company’s chicken production facilities continued to operate at full capacity. o Consumer demand for chicken remained high and the Company was able to sell close to 100% of the chicken meat produced. o The Company’s share of industrially produced chicken in Ukraine in H1 2012 remained around 50%. o The volume of chicken meat sales to external customers in H1 2012 year-on-year remained unchanged and constituted 181,600 tonnes due to the stable utilization of all existing capacities.
o 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. o In H1 2012, 94,749 tonnes of sunflower oil were sold at an average price of USD 1,109 per tonne, which was 15% lower in price compared to H1 2011 (USD 1,303 per tonne) in line with world market price trends. o 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. This resulted in around 30% growth in H1 2012 compared to the same period last year, to almost 20,000 tonnes of frozen chicken export.
Grain growing
o In 2012 the Company expects 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.
o Despite concerns over weather conditions and significantly lower results across all early crops in Ukraine (wheat, barley, rapeseeds) and taking into account the challenging situation with harvest in the USA and Russia, our yields of early crops are good and significantly higher than Ukraine’s average, due to our operational efficiency and employment of best practice. o MHP’s current yields of wheat (5.4 tonnes per hectare) and rape (3.4 tonnes per hectare) are close to twice Ukraine’s average. o The Company benefits from high world prices for early crops as well as for corn.
Other agriculture
o Sausage and cooked meat production volumes decreased from 17,300 tonnes in H1 2011 to 16,510 tonnes in H1 2012 due to the continuous product mix optimization.
o The Company’s market share of Ukraine’s sausage and cooked meat products in Ukraine was around 10%.
Vinnytsia - new green field expansion project
• Construction of most sites has been completed, and equipment is being installed.
Production of Phase 1 is expected to be launched by the end of 2012 and reach its
full capacity of 220,000 tonnes of poultry per annum in 2015.
Treasury Shares
During the reporting period MHP has purchased 2,480,000 Global depository receipts (“GDR”) with one GDR representing an interest in one ordinary share ("Share”) at an average price per GDR of USD 11.07, through the share buy-back programme. The number of repurchased GDRs constitutes approximately 2.3% of the Company's issued and outstanding shares.
Q2 2012 highlights
o Revenue increased by 27% to USD 357 million (Q2 2011: USD 281 million).
o EBITDA increased by 45% to USD 147 million (Q2 2011: USD 101 million).
o EBITDA margin increased to 41% in Q2 2012 from 36% in Q2 2011, and significantly
increased from 28% in Q1 2012. o Net income increased by 83% to USD 122 million (Q2 2011: USD 67 million) mainly in
line with EBITDA growth, and positively affected by foreign-exchange gains.
H1 2012 highlights
o Revenue increased by 24% to USD 654 million (H1 2011: USD 527 million).
o EBITDA increased by 46% to USD 231 million (H1 2011: USD 158 million)
o EBITDA margin increased to 35% (H1 2011: 30%).
o Net income increased by 97% to USD 170 million (H1 2011: USD 86 million) mainly in
line with EBITDA growth.
Commenting on the results, Yuriy Kosyuk, Chief Executive Officer of MHP, said:
"The Company has continued to perform strongly in results and operations in the first half of 2012. Poultry prices growth in H1 2012 was strong, as previously forecasted. As a result, we have delivered robust revenues and EBITDA growth in the poultry business segment, which greatly contributed to the Company’s overall profitability.
Our expectations regarding results in the grain growing segment are favorable despite weather challenges during the second quarter of 2012. With regard to the early crops, MHP experienced a good harvest with good yields, which again are substantially stronger than Ukraine’s average. World grain prices this year are very strong, driven mostly by trends on US market, which guarantees us good performance of our grain growing segment for the full year.
As I promised to our shareholders, since June 2012 we have started trial production at Vinnytsia project testing equipment, processes and resources.
Looking ahead, the quality of our products continues to attract consumers, and demand remains high. We are discovering new export markets, and building strong relationships with new partners. We are therefore confident that we will continue to expand in line with our strategy and to produce strong financial results.”
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