MHP poultry price rises 32% yoy in 2Q21

Ukraine’s largest poultry producer MHP (MHPC LI,
MHPSA) sold 181.8 kt of poultry meat in 2Q21, a 6.4% yoy growth (and 17.8% qoq
increase), according to its July 16 trading update. The company’s poultry
exports surged 23.2% yoy to 109.1 kt (up 32.6% qoq), while domestic sales
decreased 11.7% yoy to 72.8 kt (or 0.9% growth qoq) in 2Q21. MHP’s poultry meat
sales at its EU-based facilities were 19.5 kt, or a 23.0% yoy increase (and
32.6% qoq growth) in 2Q21.

During the quarter, the average selling poultry price
jumped 31.5% yoy to USD 1.67/kg (and a 22.8% increase qoq). That implies MHP’s
revenue from poultry sales increased 27.6% yoy to USD 304 mln in 2Q21. MHP’s
EU-based facilities average selling price was EUR 2.53/kg, or 1.2% higher yoy
(and 2.0% hidger qoq) in 2Q21.

In 1H21, MHP’s poultry sales increased 2.4% yoy to
336.2 kt and the average selling price jumped 26% yoy to USD 1.56/kg. The
company’s export sales increased 12.2% yoy to 191.3 kt, while domestic market
sales slid 8.2% yoy to 144.9 kt in 1H21. Also, the company’s share of poultry
export sales to MENA region surge to 47% vs. 36% year ago, while shares of
other regions slid 1-2 pp in average.

Andriy Perederey: The company
showed a positive operating dynamic after the avian flu outbreak in Vinnytsia
region in late 2020. The company’s poultry sales increased due to higher export
volumes to the MENA region. Also, the trend of protein prices increase helped
support the company’s selling prices. We expect the company will further
increase its poultry sales in 2H21 and will show positive annual poultry sales
dynamics. Also, we expect that the company’s EBITDA in the poultry segment will
be in the range of USD 260-270 mln in 2021 (vs. USD 194 mln in 2020).