MHP’s 9M10 sales grow 35% y-o-y to USD 676 mln

Myronivsky Hliboproduct (LSE: MHPC LI) released 9M10 financials yesterday, according to which the January-September top line grew 35% y-o-y to USD 676 mln, driven by a 29% y-o-y increase in poultry meat output to 249,500 mt, and a 12% y-o-y gain in Ukraine’s chicken price in 3Q10 to UAH 14.05 (ex-VAT) on higher grain prices. 9M10 EBITDA was up by 18% y-o-y to USD 232 mln, with EBITDA margin was 34% or 5 pp below last year’s results. Net income rose 54% y-o-y to USD 158 mln, while net margin improved 3 pp to 23% for January-September this year. Ruslan Patlavskyy: The reported 9M10 financials bode well for our FY2010 top line forecast of USD 911 mln (+28% y-o-y), and suggest that the company is likely to outperform our conservative EBITDA estimate of USD 284 mln (+5% y-o-y; EBITDA margin: 31%, -7 pp y-o-y)) and net income of USD 176 mln (+10% y-o-y; net margin: 19%, -3 pp y-o-y)  given higher than expected self-sufficiency in corn and sunflowers despite the summer drought. This said, we reiterate our BUY recommendation for the stock with a TP of USD 22.8 per share and will review our financial forecasts for FY 2010 shortly.