MHP poultry sales decline 6% yoy in 2Q20

Ukraine’s largest poultry producer MHP (MHPC LI, MHPSA)
sold 170.9 kt of poultry meat in 2Q20, a 5.7% yoy decrease (and 8.4% qoq
increase), according to its July 27 trading update. The company’s poultry
exports dropped 9.2% yoy to 88.5 kt (up 7.9% qoq), while domestic sales slid
1.7% yoy to 82.4 kt (or 8.9% qoq growth) in 2Q20. MHP’s poultry meat sales at
its EU-based facilities were 15.9 kt, or flat yoy (and 4.4% growth qoq) in
2Q20.

During the quarter, the average selling poultry price
dropped 15.8% yoy to USD 1.27/kg (and 7.3% decrease qoq). That implies MHP’s
revenue from poultry sales dropped 14.2% yoy to USD 217 mln in 2Q20. MHP’s
EU-based facilities average selling price was EUR 2.5/kg, or 6.4% lower yoy
(and 2.3% lower qoq) in 2Q20.

In 1H20, MHP’s poultry sales decreased 4.9% yoy to
328.4 kt and the average selling price fell 9.0% yoy to USD 1.32/kg. The
company’s export sales dropped 10.5% yoy to 170.6 kt, while domestic market
sales rose 2.0% yoy to 157.8 kt in 1H20.

Andriy Perederey: The company’s qoq increase in 2Q20 was mostly the result of a low
comparison base as the avian flu outbreak in the Vinnytsia region limited its
output in 1Q20. We expect the company will further increase its poultry sales
in 2H20 to show positive annual poultry sales dynamics, though its key P&L
metrics are likely to worsen yoy for its 2020 results.