Ukraine-based poultry producer Myronivsky Hlibroproduct (MHP) has reported a year-on-year increase of 32% in total revenue with a gross profit margin of 19%.
Total revenue achieved for the 2019 financial year ended December 31 was US$2.056 billion, according MHP in its final report on the agrifood group’s performance. This compares with US$1.552 billion in the previous year.
Drivers for this growth were increasing sales of poultry meat, vegetable oils, and convenience foods, the firm reports.
Also contributing to the increase in revenue for MHP was the acquisition of Perutnina Ptuj, a Slovenia-based poultry company. As well as its home market, it has operations in Croatia, Serbia, Bosnia-Herzegovina, Austria, North Macedonia, and Romania. These contributed to making the firm the largest producer of poultry meat in the Balkans region in southeast Europe.
In February 2019, MHP commenced the acquisition of Perutnina Ptuj, which became wholly owned by MHP in September of 2019. MHP’s “European operation” subsequently contributed US$271 million to the group’s overall revenue over the latter 10 months of the year.
Despite the increase in revenue, gross profit in 2019 was down 6% year-on-year at US$398 million. This led to an eight percentage-point reduction in gross profit margin to 19%.
At more than 728,900 metric tons (mt), MHP’s poultry production in 2019 was up by 18% from the previous year. Of this total, 79,358 metric tons or 10.9% was the output from the firm’s European operation.
Decline in chicken prices impacted profitability
Average prices achieved in Ukraine by MHP in 2019 were 38.06 hryvnia (UAH; US$1.40) per kilo, which is 5% below the previous year. For Perutnina Ptuj, the mean price per kilo over last year was EUR2.64 (US$2.86).
Lower prices contributed to a year-on-year contraction of 31% in MHP’s operating profit. In 2019, this stood at US$216 million. As a result, operating margin shrank from 20% in 2018 to 11% last year.
Despite this downward pressure on prices, MHP reports net profit for the 2019 financial year of US$215 million. This compares with US$128 million the previous year.
Growth in chicken meat exports
Rising volumes of trade to the European Union (EU) and Middle East and North Africa (MENA) region supported a 25% year-on-year increase in MHP’s exports to more than 357,400 mt. A further 13,880 mt were exported by the European operation. At US$1.186 billion, exports account for 58% of MHP’s total revenue last year, a slight reduction from the 60% share of total sales in 2018.
Throughout the report, sales are reported as chicken meat without co-products, and UAH prices are given net of value added tax (VAT).
Operational progress in 2019
As well as the acquisition of Perutnina Ptuj last year, MHP continued to develop production sites at its Vinnytsia poultry complex. The firm now has six rearing sites in operation.
During 2019, MHP has set up a new group to transform business efficiency. The firm also reports a gradual shift in its product range for the Ukrainian market towards more value-added primary and further processed products.
More on MHP
With an annual slaughtering of 349 million broilers, MHP is in sixth position in the European rankings of WATTAgNet Top Broiler Producers. It lies close behind Italy’s Gruppo Veronesi and PHW Group of Germany, which each have a yearly production estimated at 350 million birds.
Just two months ago — in February of this year — MHP announced it was evaluating a number of possible expansion projects in Saudi Arabia, Serbia, and Croatia.
