MHP poultry sales rise 21% yoy in 1Q19

Ukraine’s leading poultry producer MHP (MHPC LI,
MHPSA) raised poultry meat sales 21.2% yoy (up 13.7% qoq) to 164.0 kt in 1Q19,
according to the company’s trading update published on Apr. 18. Total poultry
production volume increased 12.6% yoy to 171.3 kt (7.4% qoq rise) in 1Q19. The
company’s domestic sales rose 29.8% yoy to 93.0 kt (30.6% qoq increase), while
export sales improved 12.4% yoy to 71.0 kt (a 2.7% qoq drop) in 1Q19. The
average poultry price was USD 1.41/kg in 1Q19, which was slightly lower yoy and
4.8% less qoq. It implies MHP’s revenue from poultry sales rose 6.9% yoy to
about USD 232 mln in 1Q19.

Also, MHP reported healthy conditions for its winter
crops (wheat and rapeseed) sown on 94,000 ha. The company expects to harvest
crops from a total area of 365,000 ha in 2019 (which is flat yoy).

Andriy Perederey: The company’s key EBITDA driver in 2019 will be a rise in poultry
export volumes. Stable poultry prices and the Ukrainian currency exchange rate
also will support the company’s financial results. Favorable weather conditions
are also being forecasted, which will support the company’s farming segment and
ability to produce strong results. We remain bullish on MHP stock and neutral
on its Eurobonds.