MHP poultry sales rise 18% yoy in 2Q19

Ukraine’s largest poultry producer MHP (MHPC LI,
MHPSA) sold 181.3 kt of poultry meat in 2Q19, a 18.4% yoy surge (and a 10.5%
qoq increase), according to its July 17 trading update. The increase was driven
by export sales, which jumped 38.9% yoy (and a 37.3% qoq increase) to 97.4 kt.
Domestic sales amounted to 83.8 kt in 2Q19, which is 1.0% higher yoy, but 9.9%
lower qoq. The company’s export sales accounted for 54% of total poultry sales
in 2Q19 (up from 46% a year ago).

During the quarter, the average selling poultry price
rose 3.7% qoq to UAH 40.1/kg (in USD terms, the increase was 6.6% qoq to USD
1.51/kg).

MHP also separately reported on the result of its
newly acquired EU-based company Perutnina Ptuj, which sold 15.8 kt of poultry
meat in 2Q19.

Andriy Perederey: MHP’s surge
of poultry sales volumes, with a strong export share in total sales and
improvement of poultry prices, will improve the company’s financial results in
2Q19. We expect that the poultry segment will contribute about USD 89 mln to
the company’s EBITDA in 2Q19, or 16% more yoy. Also, we expect that the company
will be able to generate EBITDA of about USD 335 mln in 2019, or an 8% yoy
increase.

We remain bullish on MHP stock and neutral on its
Eurobonds.