MHP receives USD 40.5 mln in government subsidies in 8M17

Ukraine’s leading poultry meat producer and farmer MHP (MHPC LI, MHPSA) got USD 40.5 mln (or UAH 1,074 mln) in state subsidies in 8M17, the epravda.com.uanews site reported on Oct. 30. MHP received USD 19.6 mln in subsidies in 2Q17 and USD 23.8 mln in 1H17, according to its 1H17 financial results.Andriy Perederey: The Ukrainian government introduced a direct subsidy for meat, fruit and vegetable producers in early 2017. Based on this news report, we expect MHP received about USD 20 mln in state subsidies in 3Q17. If this level is maintained until the year end, we expect that MHP’s total 2017 subsidy will be about USD 65 mln, or 92.5% higher yoy. The 2017 subsidy regime is even more favorable for the company than the partial VAT reimbursements in 2016.