OREANDA-NEWS. 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, announces its financial results for the fourth quarter 2012 and full year ended 31 December 2012.

Key operational highlights FY 2012

Vinnytsia - expansion project

• The Vinnytsia complex, in which USD 636 million has been invested to date was commissioned to budget and ahead of schedule. All production sites of the project moved into trial production in the summer of 2012 and then were transitioned to in industrial production at the end of 2012.

• Currently a hatchery, a slaughter house and five rearing brigades etc. are operational and these units will gradually increase their capacity in line with the Company’s production plan.

• In 2012, the Vinnytsia complex produced around 20,000 tonnes of chicken meat. When full production is reached in 2015, this first phase will have annual capacity of 220,000 tonnes.

Poultry

• In 2012, MHP increased its poultry production volumes by 5% to 404,000 tonnes of poultry meat (2011: 384,000 tonnes of poultry meat), mostly due to the launch of the Vinnytsia complex.

• The Company’s total volume of chicken meat sold to third parties remained relatively stable, increasing by 1% to 375,300 tonnes (2011: 370,900 tonnes).

• MHP’s market share of industrially produced chicken in Ukraine remained 50% and share of total poultry consumption remained at around 35%.

• Over the 2012 full year, the average chicken price increased by 15% to UAH 17.19 (net of VAT) per kg against UAH 15.00 (net of VAT) per kg in 2011.

• Total export sales of chicken in 2012 increased by over 65% compared to 2011 to 58,000 tonnes of frozen chicken meat, equivalent to 15% of total poultry sales volumes. In 2012, the Company opened new export sales markets which included UAE, Kenya, Oman and others.

• On 4 December 2012, EU authorities announced that Ukraine had been added to the list of countries that have the right to import poultry products into the EU. As MHP’s facilities were pre-certified by the EU Commission previously in 2010, MHP now has the potential to sell poultry products into EU countries in the near future.

• In 2012, MHP sold 195,000 tonnes of sunflower oil, 12% more than in 2011, due to the launch of the Vinnytsia complex.

Grain Growing

• The total land bank at the end of 2012 constituted around 285,000 hectares, which represents

an increase of around 5,000 hectares of land from 2011. Of this, approximately 250,000 hectares were used in grain growing segment for grain production and approximately 30,000

hectares were used in other agricultural segment.

• In 2012, the Company harvested around 250,000 hectares of land in grain growing operations with a total yield of 1.6 million tonnes (primarily grain corn) and oilseed; this was 6% less than the harvest of 2011 as a result of challenging weather conditions.

Other Agricultural

• Processed meat production remained the main contributor to the other agricultural segment.

• MHP is a market leader with close to 10% market share in meat processing in Ukraine.

• In 2012 MHP’s sales volume of value added products decreased by 5% to 35,200 tonnes compared to 37,000 tonnes in 2011 as a result of optimizing the product portfolio during the year. However, the average sausage and cooked meat prices during 2012 increased significantly by 11% to UAH 22.20 per kg (net of VAT) compared to UAH 20.01 (net of VAT) per kg in 2011.

Key financial highlights for FY 2012

• Revenue increased by 15% to USD 1,408 million (2011: USD 1,229 million).

• EBITDA increased by 17% to USD 468 million (2011: USD 401 million).

• EBITDA margin remained at the same level at 33%.

• Net income from operations increased by 20% to USD 311 million (2011: USD 259 million).

• EPS increased by almost 24% from USD 2.26 to USD 2.80.

Commenting on the results, Yuriy Kosyuk, Chief Executive Officer of MHP, said:

"2012 has been a good year in the Company’s history as we maintained our track record of achieving the ambitious targets we set for ourselves. We took several significant steps towards our strategic objective, of building a stable, sustainable business with strong growth prospects. This was underpinned by strong financial results both in poultry and grain growing segments. After substantially completing this phase of our intensive CAPEX programme in 2012, we expect strong, sustainable positive cash flow in 2013 and beyond.

We commenced trial production at our new world class Vinnytsia poultry complex ahead of schedule and are now poised to accelerate production in 2013, adding at least 60,000 tonnes to our capacity in the first year of production. By 2018, we expect Vinnytsia to more than double MHP’s previous 400,000 tonnes production capacity to more than 800,000 tonnes.

Our exports of chicken meat grew steadily during the year, reaching 15% of total poultry sales and the announcement that Ukraine is now licensed to export poultry products to the EU provides a further opportunity for export growth going forward.

Our grain growing business continues to perform well, reflecting strong grain prices worldwide and successful crop management that has once again delivered higher yields than Ukrainian averages. This remains an integral feature of our unique, self-sufficient business model with poultry and grain under one roof enabling us to control costs and quality.

Our objective is to carry on expanding and strengthening our leading market position, to actively continue to implement our strategy and deliver strong financial performance, whilst achieving sector leading results. We have a dedicated, stable team of professionals who understand our strategy and the steps we need to take to drive the business forward, which is a testament to the Company’s investment in its staff, enabling us to capitalise on their skills and experience.”