MHP poultry sales rise 9.2% yoy in 1Q18

Ukraine’s leading poultry producer MHP (MHPC LI,
MHPSA) reported poultry sales rose 9.2% yoy (or a 18.9% qoq jump) to 135.3 kt
in 1Q18, according to the company’s trading update published on Apr. 18. The
company produced 152.2 kt of poultry in 1Q18, a 7.3% yoy increase (or a 7.5%
qoq increase). The company’s domestic sales decreased 3.5% yoy and rose 5% qoq
to 72.2 kt, while export volumes grew 28.5% yoy to 63.1 kt (or a 40.2% qoq
increase) in 1Q18. The average poultry price was USD 1.42/kg in 1Q18, which is
21.9% higher yoy and 6.0% lower qoq. It implies MHP’s revenue from poultry
sales rose 33.1% yoy to about USD 192 mln in 1Q18.

Also, MHP reported information about conditions of
winter crops that (winter wheat, rapeseed and barley) were sowed on around
87,000 ha. So the company expects a good harvest of winter crops.

Andriy Perederey: The increase
in MHP’s poultry sales volumes, especially the share of exports in total sales,
will be the key driver of the company’s bottom line in 2018, while strong
poultry prices, in both local currency and USD terms, will support the poultry
segment’s financial results. Also, good winter crop conditions should have
reduced the risk of lower farming segment results. We remain bullish on MHP
stock and neutral on its Eurobonds.