Ukraine’s MHP posts $8m third-quarter loss

Despite the loss in the company’s unaudited trading results for the nine months and third quarter up to 30 September, there were a string of operational highlights.

Exports of poultry increased by a 70% to 58,625 tonnes (t) in the third quarter, thanks to the continual upswing in trade to the Middle East, North Africa and the EU. Production volumes, too, increased in line with growing exports, with the 149,760t of chicken up 5% year-on-year.

Growth in exports​ was reinforced by the company’s move to open a sales and distribution office in the United Arab Emirates, as part of its global export expansion strategy. The business also opened a poultry processing plant in the Netherlands. In October it announced plans to expand production capacity​ here from 1,500t to 10,000t. A timeframe was not disclosed.

‘Historically low’ prices​

“The results for the period are in line with our expectations and forecast, with no surprises to our investors,​” said chief financial officer Viktoria Kapelyushnaya in an email to this site.

“You can see, that despite low international commodity prices – prices that are historically low – and meat prices in Ukraine, in US dollar terms, the company generated a net profit of $86m [in the nine months of 2016]. With a stabilisation of currency, gross domestic product growth and deceleration in inflation, we hope local prices start growing in the near future.​

“Despite new investments in growth starting in spring 2017, we will continue to generate positive cash flows and pay an annual dividend,​” Kapelyushnaya added.

Export revenue rising​

MHP’s revenue for the nine months in 2016 stayed relatively stagnant compared to the nine months in 2015: $899m versus $898m a year earlier. Revenue accrued from exports increased by 6%, with international trade now representing 51% of the company’s total revenue.

MHP claims to be one of the leading poultry producers in Ukraine and operates a vertically-integrated farm-to-fork system. The business is listed on the London Stock Exchange, under MHPC.