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 first quarter 2013 ended 31 March 2013.

Key operational highlights

Poultry

O Our new Vinnytsia complex gradually increased operations at each production site, which are currently operating at 100% of launched capacities.

o As a result of the Vinnytsia complex launch, MHP’s production of chicken meat in Q1 2013 increased by 15% to 103,420 tonnes compared to 90,260 tonnes in Q1 2012.

o Sales of chicken meat to third parties in Q1 2013 increased by 8% reaching 91,720 tonnes compared to 85,040 tonnes in Q1 2012.

o The average price of chicken meat sales to third parties in Q1 2013 decreased by 3% to UAH 16.33 per kg of adjusted weight compared to Q1 2012 (UAH 16.75 per kg) due to the increased share of export sales.

o Export sales of chicken in Q1 2013 almost tripled the volumes of Q1 2012 and reached 23,200 tonnes. The Company continued to develop new export markets.

o Due to the increase in production of fodder at the Vinnytsia complex, MHP’s sales of sunflower oil in Q1 2013 increased by 8% to 49,310 tonnes compared to 45,558 tonnes in Q1 2012. In line with international commodity prices, the average price per tonne of sunflower oil increased by 6% to USD 1,149 compared to USD 1,085 in Q1 2012.

Grain Growing

o Winter crops (winter wheat, rapeseeds, barley and rye) are in good condition.

o Despite challenging spring weather conditions in Ukraine, MHP’s 2013 sowing campaign is complete.

o Driven by current favorable weather conditions and health of the crops, MHP expects a strong harvest in 2013.

Other Agricultural

o Sales volumes of processed meat products in Q1 2013 comprised 7,340 tonnes compared to 7,500 tonnes in Q1 2012.

o The average price for sausages and cooked meat in Q1 2013 increased by 5% to UAH 22.51 per kg (excluding VAT) compared to UAH 21.53 in Q1 2012.

o Revenue increased by 2% to USD 304 million (Q1 2012: USD 298 million).

o EBITDA decreased by 13% to USD 73 million (Q1 2012: USD 84 million) as a result of increased production costs for chicken meat (driven by higher grain prices at the end of 2012) and flat domestic poultry prices, which have not yet responded to the increased costs.

o Net income from operations decreased by 24% to USD 36 million (Q1 2012: USD 48 million), in line with EBITDA trends.

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

“I’m pleased to report that the successful launch of Vinnytsia continued to plan. As a result, in the first quarter of 2013 we substantially increased year on year poultry production volumes. At the same time we increased sales volumes of chicken meat by 8%, to almost 92,000 tonnes.

In the future, we anticipate that our export sales will grow at a higher rate compared to our domestic revenues given our strong domestic base and market share. We have witnessed this already in Q1 2013, when we increased our export sales volumes almost three times. We continued to develop new markets for our exports.

Although the current domestic poultry price is similar to last year’s price, poultry production costs went up as a result of grain price growth at the end of 2012, which resulted in an overall profitability decline of the Company in the first quarter. However, we anticipate that this adverse effect will be compensated during 2013 by increasing sales volumes of poultry and grain crops as a result of the planned expansion of our land bank.”