Higher exports help boost MHP’s 2016 bottom line

Ukraine-based poultry and grain producer MHP turned an overall loss in 2015 into profit in its last trading year, which just finished.

Svilen Milev | FreeImages.com
Svilen Milev | FreeImages.com

Ukraine-based poultry and grain producer MHP turned an overall loss in 2015 into profit in its last trading year, which just finished.

A 52 percent increase in exports of chicken meat, and achieving self-sufficiency in hatching eggs are among the key developments that helped turn the business round in 2016, according to Chief Executive Officer, Yuriy Kosyuk.

For the 2016 year, MHP achieved a 10 percent increase in poultry production to just over 573,000 metric tons (mt), and the average price of the chicken meat sold was also 10 percent higher year-on-year at UAH29.81 (US$1.09) per kg.

The significant increase in chicken meat exports to just under 190,000 mt was supported by higher volumes to the Middle East and North Africa (MENA), the European Union and other African countries. As part of the firm’s export strategy, MHP commissioned a poultry processing plant in the Netherlands and a sales office in the Middle East in 2016.

In July, following expansion of its breeding farms, MHP achieved self-sufficiency in hatching eggs.

These business developments at MHP contributed to a 7 percent year-on-year increase in revenue to US$1.135 billion, although EBITDA margin decreased from 41 percent the previous year to 37 percent in the last fiscal year. These figures are in line with management expectations, according to Kosyuk.

MHP achieved a net profit last year of US$69 million, which compares with a loss of US$113 million in 2015, and includes US$145 million of non-cash foreign exchange translation loss.

Looking ahead to the 2017 fiscal year, MHP is set to begin construction to expand its Vinnytsia site with the view to raising annual chicken meat output to a target 730,000mt by 2020.

In February, it was announced that Raftan Holding Limited (a subsidiary of MHP S.A. based in Cyprus) had disposed its entire shareholding in all businesses in the Autonomous Republic of Crimea. These included joint-stock companies Druzhba Narodov Nova and Crimea Fruit Company, and limited liability company, Druzhba Narodov.

 

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