April 19, 2016, Kyiv, Ukraine
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, announces its pre-close trading update for the three months ended 31 March 2016.
As usual, the Company's poultry production facilities continued to operate at full capacity during the reporting period.
MHP's overall production volumes of chicken meat in Q1 2016 increased by 11% and constituted 155,610 tonnes (Q1 2015: 140,370 tonnes), mainly due to the launch of several new rearing sites at Myronivska and Oril Leader poultry complexes, that have been working in trial mode.
%
change
Sales volume, third parties
tonnes 117,716 113,640 4%
Price per 1 kg net VAT, UAH 29.60 25.35 17%
Sales of chicken meat to third parties in Q1 2016 increased by 4% and constituted 117,716 tonnes of chicken meat compared to 113,640 tonnes in Q1 2015. Domestic sales volume remained at the same level.
Despite decreased exports to the CIS region by almost 30% year-over-year, during the reporting period the Company significantly increased its export sales to MENA - by around 74%, to the EU - by around 38% and by more than 4 times to Africa.
Sales volume, tonnes Q1 2016 Q1 2015
%
change
Sunflower oil 82,745 66,769 24%
Soybean oil 8,150 n/a n/a
In Q1 2016, due to increased production of fodder for chicken, MHP's sales of sunflower oil increased by 24% to 82,745 tonnes compared to 66,769 tonnes in Q1 2015.
MHP's soybean extraction plant was launched into operations in Q3 2015. Working at 50% capacity, it covers all MHP's needs in soybean sake for fodder production. In Q1 2016, soybean oil export sales were at 8,150 tonnes.
The Company considers vegetable oils exports as one of the "natural hedge" routes accumulating additional hard currency revenues and protecting the Company from volatilities in local currency.
Around 97,000 hectares of MHP's land are under winter crops (winter wheat, rapeseeds and barley), which is around 27% of the land cultivated in the grain growing segment of the Company in 2016 (around 355,000 hectares). Currently, all crops are in good condition. As a result, MHP expects good harvest of winter crops in 2016.
MHP's 2016 spring sowing campaign is ongoing now with no significant change in crops structure.
%
change
Sales volume, third parties
tonnes 8,340 5,280 58%
Price per 1 kg net VAT, UAH 44.91 39.64 13%
Sales volumes of sausage and cooked meat in Q1 2016 increased substantially to 8,340 tonnes compared to 5,280 tonnes in Q1 2015 as a result of a new product promotion strategy and advertisement campaign not only for the product range but also for the brand.
The average sausage and cooked meat price in Q1 2016 increased by 13% to UAH 44.91 per kg (excluding VAT) compared to UAH 39.64 in Q1 2015 mainly as a result of poultry price increase.
Anastasiia Sobotiuk (Kyiv) +38 044 207 00 70
a.sobotyuk@mhp.com.ua
Iryna Bublik (Kyiv) +38 044 207 00 04 i.bublik@mhp.com.ua
Notes to Editors: About MHPMHP 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 15 distribution and logistical centres, 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.
This press release might contain forward-looking statements that refer to future events or forecast financial indicators for MHP S.A. Such statements do not guarantee that these are actions to be taken by MHP S.A. in the future, and estimates can be inaccurate and uncertain. Actual final indicators and results can considerably differ from those declared in any forward- looking statements. MHP S.A. does not intend to change these statements to reflect actual results.
MHP SA issued this content on 19 April 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 19 April 2016 06:16:21 UTC
Original Document: http://www.mhp.com.ua/library/file/tu-q1-2016-final.pdf