MHP poultry sales decline 4% yoy in 1Q20

Poultry sales at Ukraine’s leading poultry producer MHP
(MHPC LI, MHPSA) decreased 3.8% yoy to 157.7 kt in 1Q20, according to the
company’s trading update published on Apr 23. The company’s poultry production
rose 4.3% yoy to 178.6 kt in 1Q20. The company’s poultry export sales fell
11.8% yoy to 82.1 kt, while domestic poultry sales rose 6.7% yoy to 75.7 kt in
1Q20. The average poultry price was USD 1.37/kg in 1Q20, which is 3.1% lower
yoy. It implies MHP’s revenue from poultry sales decreased 6.9% yoy to USD 261
mln in 1Q20. MHP’s EU-based facilities sales reached 9.2 kt at an average price
of EUR 2.75/kg in 1Q20.

Also, MHP reported solid conditions for its winter
crops (wheat and rapeseed) sown on 72,140 ha. The impact of the COVID-19
disease has been insignificant on its operations, the company said.

Andriy Perederey: Rather than
being affected by the coronavirus, MHP’s sales decreased due to an avian flu
outbreak in the Vinnytsia region in 1Q20, where the company’s key operating
facilities are located. This month, the company’s poultry production facilities
have operated in full capacity. So we expect an increase of poultry sales in
2Q20. Also, we expect that poultry sales will be higher yoy in 2020. So, the
rise in poultry sales and solid crop conditions will support the company’s 2020
EBITDA.