The war in Ukraine continues to impact the agri-food businesses of MHP SE, according to the group’s just-published report for the 2023 financial year ended December 31, 2023.
Despite the challenges, for the 12 months ended December 31, 2023, the group’s total revenue was up 14% year-on-year at more than US$3.02 billion.
At US$339 million, operating profit was 33% higher than in the previous year, while operating margin was almost unchanged at 11%. Margin on Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) was also similar to 2022 at 15%, while adjusted EBITDA was 16% higher at US$445 million.
A net loss of US$231 million for the previous year was reversed to a net profit of US$142 million for 2023. This the firm attributed mainly to a much-reduced non-cash foreign exchange loss in the end just ended.
At almost US$1.81 billion, MHP raised its export revenue by 13% year-on-year, so this stream accounted for 60% of group revenue in 2023. For the previous year, this parameter was just one percentage point higher.
Higher poultry exports in 2023
At just under 397,000 metric tons (mt) for the 12 months of last year, MHP achieved an 8% year-on-year increase in poultry meat exports from its Ukrainian operations.
Its domestic poultry production was slightly higher at around 718,600mt, while the average price was the same as for 2022 at US$1.95 per kilo (excluding tax).
Annual production was up 6% year-on-year at MHP’s separate business based in the Balkans region — Perutnina Ptuj — at just over 131,000mt. At EUR3.54 per kilo, the average price for this subsidiary was also up 6% from the previous year.
Increased crop, vegetable oil output
In 2023, MHP harvested a range of crops from a slightly increased area of almost 347,000 hectares (857,000 acres) from its agricultural operations.
Total harvest amounted to almost 3.56 million metric tons (mmt), including 1.35mmt corn, 267,000mt wheat, 185,000mt sunflower, 123,000mt rapeseed. 185,000mt soy, and 451,000mt of other crops. MHP’s production of all these grain and oilseeds was higher in 2023 than the previous year — both in total and individually.
For its Vegetable Oil operations, MHP achieved year-on-year increases of 71% and 24% in sales volumes of sunflower oil and soybean oil, respectively. These fed through into a 31% increase in revenue, and gross profit up 14% year-on-year.
Outlook for 2024
Due to the ongoing risks of operating under war conditions, MHP states it is unable to give a confident indication of its business outlook.
Attacks by Russian forces in recent months on civilian infrastructure across Ukraine indicate the threat under which the company has been operating, it say, while the group continues to prioritize Ukraine’s food security.
More on MHP
With annual slaughterings of just over 697 million chickens, MHP is the leading poultry company — not only in its home market of Ukraine — but in Europe, according to WATTPoultry.com’s Top Poultry Companies survey.
According to the firm’s own web site, MHP SE is the parent company of the Ukraine-headquartered international food agri-food group, as well as Perutnina Ptuj Group in the Balkans region in southeastern Europe.
In Ukraine, MHP is a fully vertically integrated poultry producer, from growing of feed crops, through hatching and growing to processing, marketing, distribution, and sales through franchise outlets. As well as corn for poultry feed, the company produces crops including wheat and rapeseed for sale to third parties.
Perutnina Ptuj is a leading integrated chicken and poultry meat-processer in the Balkans region. It has production sites in Slovenia, Croatia, Serbia, and Bosnia-Herzegovina, and distribution centers in Austria, North Macedonia, and Romania.
MHP has its registered office in Limassol, Cyprus, and trades on the London Stock Exchange.
Earlier this year, French poultry farmers mounted a protest at a large agricultural event. They blamed imports of chicken from Ukraine for the challenges faced by their businesses. In response, a senior MHP executive said that the producers’ anger was misplaced, and was the result of political agitation.
In April, MHP announced it was launching a consumer corner QR code in Ukraine. From codes displayed in the company’s retail stores and fast-food restaurants, consumers can access the firm’s web site to find out more about the quality and safety of the products they are purchasing.
