MHP boosts poultry production 23% yoy in 2Q14

Обзоры по компаниям и отраслям 15.07.2014 Ukraine’s largest poultry producer, MHP (MHPC LI), reported on Jukly 15 a set of strong operating results for 2Q14. Poultry sales increased 23% yoy to 139.7 kt, as the capacity load of the Vinnytsia poultry farm continued to grow. Average selling price, denominated in hryvnias, increased 10% yoy to UAH 17.85/kg. In its grain-growing segment, the company reported it has started harvesting rapeseed, barley and wheat. MHP expects 2014 yields to remain flat yoy. The company reported a 5% yoy decrease in meat product sales (to 8.3 kt), but the average selling price of those products advanced 14.5% yoy to UAH 26.5/kg. Roman Topolyuk: MHP’s core business segments continue to perform strongly, despite the challenging economic environment and unprecedented political events in Ukraine. Poultry sales during the quarter came in slightly higher than we expected, so the company remains on track to meet our projections of 550 kt poultry sales in 2014 (+17% yoy). The selling price for poultry in hryvnia terms during the quarter also advanced better than we expected (by 1%), which has mitigated somewhat the 21% yoy decrease in dollar-denominated prices. Given the strong demand on the local market and robust outlook for increased exports, we expect average selling prices in hrvynia to advance further, thus compensating the deep hryvnia devaluation beginning in 2014. Our expectation of MHP’s EBITDA growing 24% yoy to USD 485 mln is viable if yields remain at least stable and the harvest comes in strong, as expected.