MHP poultry sales slides 5% yoy, prices jump 32% yoy in 3Q21

Ukraine’s largest poultry producer MHP (MHPC LI, MHPSA)
sold 185.4 kt of poultry meat in 3Q21, which is 5.0% lower yoy (and 2.0% higher
qoq), according to its Oct. 20 trading update. The company’s poultry exports
were 109.0 kt, almost flat in yoy and qoq terms, while
domestic sales slid 9.5% yoy to 78.4 kt (or 7.8% more qoq) in 3Q21.

During the quarter, the average poultry selling price
jumped 31.6% yoy to USD 1.79/kg (and 7.2% qoq increase).

In 9M21, MHP’s poultry sales slid 0.4% yoy to 521.5
kt, while the average selling price jumped 22.4% yoy to USD 1.64/kg. The
company’s export sales volumes rose 7.6% yoy to 300.1 kt and domestic poultry
sales decreased 9.6% yoy to 221.3 kt in 9M21.

MHP’s expectations for spring crop yields in 2021 are
about 10.8 t/ha for corn (93% higher yoy) and about 3.4 t/ha for sunflower (21%
higher yoy). The company’s wheat yield rose 16% yoy to 5.9 t/ha in 2021.

Andriy Perederey: MHP’s
poultry sales slid due to lower domestic sales in 3Q21, which looks like a
market response to the significant increase of prices. The expected record-high
harvest results of key crops (corn & sunflower seed) will have a positive
impact on the company’s EBITDA in 2021. We estimate MHP’s EBITDA in the poultry
segment will be in the range of USD 260-270 mln in 2021 (vs. USD 194 mln in 2020).
We see MHP’s USD 600 mln EBITDA guidance in 2021 (up 52% yoy) as realistic.