MHP boosts poultry production by 6% in 2016
26 January 2017
Ukraine’s largest poultry producer MHP (MHPC LI, MHPSA) announced in its pre-close trading update on Jan. 26 that the company boosted its poultry production 6% yoy to 601 kt in 2016. Its poultry sales volume increased 7% yoy to 575 kt, while the average price of poultry rose 10% yoy to UAH 30/kg.
Also, poultry export sales surged 47% yoy to 193 kt in 2016, which exceeded the company’s expectations for the year. In 2016, the company’s export share stood at 33% of total poultry sales volumes.
In its grains segment, MHP harvested 2.4 mmt of grains (44% of which was corn) in 2016, which is a 25% yoy increase. MHP also boosted its meat processing product sales by 30% yoy to 38 kt in 2016, while the average price per kg increased by 8% yoy to UAH 47.
MHP’s 4Q16 and 2016 financial results will be published on March 15, 2017.
Igor Zholonkivskyi: The reported results were mostly as expected although 575 kt in poultry sales volume fell slightly short of our 600 kt forecast. The 2016 EBITDA is likely to be slightly less than our initial expectation of USD 400 mln (vs. USD 458 mln in 2015).
As the domestic poultry market seems to be stagnating due to the slow economy, MHP has managed to improve its export share, though 33% is certainly not enough to successfully mitigate domestic currency risks. That is illustrated by the expected USD-denominated EBITDA decline, despite rising poultry sales volume.
As we expect the USD/UAH exchange rate to remain relatively stable in 2017, MHP is likely to return to growth in USD-terms in 2017. Our position on the MHPSA Eurobond remains neutral.
