MHP’s revenue rises 48% yoy in 1Q10 in USD terms

MHP (LSE: MHPC LI) increased its revenue 48% yoy in USD terms in 1Q10, according to unaudited financial results released this morning. MHP also said its EBITDA remained stable at USD 49 mln, though its EBITDA margin declined 12 pp yoy to 25% in 1Q10. MHP’s net income dropped 8% yoy to USD 36 mln, as its net margin decreased 11 pp yoy to 18%. Net debt decreased ~3% qoq to USD 474 mln, while its net debt/trailing 12M EBITDA ratio dropped from 1.81x (as of 12/31/09) to 1.75x as of 03/31/10). Ruslan Patlavskyy: The company said the major reasons behind the 1Q drops in EBITDA and net margins were flat yoy 1Q10 chicken meat prices and increased input costs due to: (1) ~48% yoy growth in corn prices, (2) higher sunflower protein costs; and (3) hatchery egg imports for its Myronivka phase 2 facility as Starynska breeding farm was launched post-reporting period. We are expecting management to provide further information about the company’s costs structure as MHP claims full self-sufficiency in corn, which theoretically should mitigate the negative effect of growing corn prices on consolidated EBITDA.