MHP poultry sales grow 10% yoy in 4Q20

Ukraine’s largest poultry producer MHP (MHPC LI,
MHPSA) sold 174.3 kt of poultry meat in 4Q20, which is 9.9% yoy growth (and
10.7% lower qoq), according to its Jan. 28 trading update. The company’s
poultry exports rose 8.1% yoy to 94.7 kt (or a 12.7% decline qoq), while
domestic sales swelled 12.1% yoy to 79.6 kt (or 8.2% lower qoq) in 4Q20. MHP’s
poultry meat sales at its EU-based facilities were 15.2 kt, or 7.1% more yoy
(and 9.8% lower qoq) in 4Q20.

During the quarter, the average poultry selling price
slid 4.9% to USD 1.36/kg (and was flat qoq), while MHP’s EU-based facilities’
average selling price declined 6.8% yoy to EUR 2.48/kg, or flat qoq in 4Q20.

In 2020, MHP’s poultry sales climbed 4.2% yoy to 698.0
kt, while the average selling price dropped 8.8% yoy to USD 1.34/kg. The
company’s export sales gained 4.6% yoy to 373.7 kt and domestic poultry sales
rose 3.8% yoy to 324.3 kt in 2020.

Also, MHP harvested 1,706 kt of crops (29.1% lower
yoy) from 356,000 ha in 2020. The company’s corn yield dropped 40.4% yoy to 5.6
t/ha, its wheat yield declined 20.3% yoy to 5.1 t/ha, its sunflower seed yield
fell 22.2% yoy to 2.8 t/ha, its rapeseed yield decreased 13.3% yoy to 2.6 t/ha
and its soybean yield slid 14.8% yoy to 2.3 t/ha in 2020. The company’s yields
fell due to unusually hot and arid weather conditions in the final weeks of the
growing season in 2020.

Andriy Perederey: The company’s annual poultry sales rose on a yoy basis despite
outbreaks of the avian influenza (outside its facilities) in 1Q20 and in
December 2020. We expect MHP’s farming segment results will be supportive for
the company’s total EBITDA in 2020, despite the lower yield of key crops this
season. Based on its trading update, we confirm our expectation that MHP’s
EBITDA will be in the range of USD 400-415 mln in 2020, which would be a slight
decline from USD 427 mln in 2019.