MHP SE October 20, 2015, 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, is pleased to announce today its pre-close trading update for the third quarter and nine months ended 30 September 2015.
Owing to the increased production volumes at the Vinnytsia poultry farm (100% utilization since the beginning of 2015), poultry production volumes in Q3 2015 increased by 6% to 142,295 tonnes (Q3 2014: 133,700 tonnes) and in 9M 2015 increased by 4% to 403,300 tonnes (9M
2014: 420,720 tonnes).
Poultry | Q3 2015 | Q3 2014 | % change | 9M 2015 | 9M 2014 | % change |
Sales volume, third parties tonnes | 150,260 | 144,790 | 4% | 407,680 | 396,780 | 3% |
Price per 1 kg net VAT, UAH | 27.62 | 22.08 | 25% | 26.92 | 18.61 | 45% |
As a result of higher production volumes of chicken meat year-over-year in the third quarter of 2015 sales volume constituted 155,260 tonnes, which is 4% higher than in Q3 2013 and in nine months of 2015 amounted to 407,680 tonnes, which is 3% higher than in 9M 2014.
Oils
Sunflower Oil | Q3 2015 | Q3 2014 | % change | 9M 2015 | 9M 2014 | % change |
Volume, tonnes | 71,900 | 74,950 | -4% | 217,710 | 212,115 | 26% |
Price, US$/t | 801 | 847 | -5% | 786 | 853 | -8% |
In Q3 2015, MHP sold 71,900 tonnes of sunflower oil, which was 4% lower than in Q3 2014. The average price of US$801 per tonne in Q3 2015 was 5% lower than in Q3 2014 (US$847 per tonne) in line with world market trends. In 9M 2015, 217,710 tonnes of sunflower oil, which was 26% higher than in 9M 2014, were sold at an average price of US$786 per tonne, which was 8% lower in price compared to 9M2014 (US$853 per tonne).
Since Q2 2015 MHP has started exporting soybeans oil produced from last year harvest using one of the Ukrainian soybeans oil extraction plants (not MHP facility). At the same time, soybeans cake is used for fodder production at MHP's fodder production facilities.
In Q3 2015 MHP exported around 5,140 tonnes of soybeans oil at US$745 per tonne. In 9M 2015 MHP exported around 10,240 tonnes of soybeans oil at US$729 per tonne.
The Company considers soybeans oil exports as one of the 'natural hedge' routes accumulating additional hard currency revenues and protecting the Company from volatilities with local currency.
In 2015 in grain growing operations MHP is to harvest around 340,000 hectares of land in Ukraine, of which 50,000 ha are newly acquired assets as a result of swap agreement with Agrokultura AB, whereby the Group has agreed to swap group of companies Voronezh Agroholding with the group of companies Agrokultura Ukraine.
In October 2015, MHP has expanded its land bank by acquiring corporate rights of Dnister Agro (9,200 ha with a location of land in Vinnytsia and Khmelnytsky regions).
MHP's current total land bank constitutes around 360,000 ha of land in Ukraine.
Due to the favorable weather conditions in Ukraine, operational efficiency and employment of best practice, our yields of early crops are high with wheat 6.0 t/ha and rapeseeds 3.4 t/ha in net weight andsignificantly higher than Ukraine's average (wheat - 3.8 t/ha, rapeseeds - 1.7 t/ha. Source: APK-Inform, bunker weigth).
The Company's harvest of late crops (corn, sunflower and soybeans) is on track. As of today, 60% of corn, 98% of sunflower and 98% of soybeans have been gathered. Unfortunately, due to dry weather conditions during July and August, which mainly influenced corn yield in Ukraine, MHP's corn, sunflower and soybeans yields are expected to be lower than forecasted earlier.
Our autumn sowing campaign of winter wheat, rapeseed and barley is almost complete.
The Company is now presenting the results of wheat and rapeseed harvest from its land bank in Ukraine (including Agrokultura).
2015 | 2014 | |||
Production, tons | Cropped hectares* | Production, tonnes | Cropped hectares* | |
Corn | In process | In process | 1,180,793 | 126,842 |
Wheat | 313,730 | 52,350 | 260,670 | 43,016 |
Sunflower | In process | In process | 167,014 | 49,551 |
Rapeseed | 76,400 | 22,655 | 39,566 | 10,493 |
Soya | In process | In process | 53,867 | 25,462 |
Other** | In process | In process | 324,765 | 34,636 |
Total: | n/a | n/a | 2,026,675 | 290,000 |
* - Actual hectares under crop and excluding land left fallow as part of crop rotation, including Agrokulura land
** - Include barley, rye, beans and other
average*
Ukraine'saverage**
MHP'saverage*
Ukraine'saverage**
Corn | 7. 3*** | In process | 9.3 | 6.2 |
Wheat | 6.0 | 3.8 | 6.1 | 4.0 |
Sunflower | 3.2*** | In process | 3.4 | 1.9 |
Rapeseed | 3.4 | 1.7 | 3.8 | 2.5 |
Soya | 1.7*** | In process | 2.1 | 2.2 |
* - Tonnes per hectare
** - MHP yields are net weight, Ukraine - bunker weight
*** - MHP's current yields of late crops
Other Agricultural Operations | Q3 | Q3 | % | 9M | 9M | % |
Meat processing products | 2015 | 2014 | change | 2015 | 2014 | change |
Sales volume, third parties tonnes | 8,960 | 8,780 | 2% | 20,950 | 23,950 | -13% |
Price per 1 kg net VAT, UAH | 43.71 | 28.65 | 53% | 42.92 | 26.61 | 61% |
During the third quarter of 2015, sausage and cooked meat production volumes increased by 2% to 8,960 tonnes compared to 8,780 tonnes during the third quarter of 2014. During the first nine months of 2015 production volumes decreased by 13% to 20,950 tonnes.
At the same time the average sausage and cooked meat prices during the third quarter of 2015 increased by 35% to UAH 43.71 per kg (excluding VAT) and through the first nine months of 2015 increased by 61% to UAH 42.92 per kg (excluding VAT).
Anastasiia Sobotiuk Iryna Bublyk
Kyiv: +38 044 207 99 58
a.sobotyuk@mhp.com.ua
Kyiv: +38 044 207 00 04
i.bublik@mhp.com.ua
MHP 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 centers, 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.
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