MHP turns half-year net loss into profit

MHP has turned around a net loss for the first half of 2020 into a profit this year.

(Courtesy MHP)
(Courtesy MHP)

Headquartered in Ukraine, international agri-food group MHP SE has published its latest quarterly financial performance. With revenue and profitability improved in all parameters, the group has turned around a net loss for the first half of 2020 into a profit this year.

Among the highlights of its financial results for the second quarter of the year just published, MHP SE reported a 28% increase in revenue year-on-year to US$542 million.

For the April-June period of 2021, export revenue increased by 32% compared with the same quarter of last year. At US$285 million, this business now accounts for 53% of the group’s total revenue.

While operating margin more than doubled from the second quarter of 2020, operating profit increased from US$91 million to US$239 million. MHP reports this as a year-on-year increase of 163%.

At US$277 million, adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) was 12% above the level of last year. Adjusted EBITDA margin increased from 30% to 51%. 

With its significant impacts on net profit, MHP’s reports this performance parameter both including and excluding adjustments for foreign exchange differences. Including non-cash foreign exchange gains of US$31 million, net profit was US$231million. This compares with US$112 million and a gain of US$52 million in the second quarter of 2020. 

Half-year results in 2021: net profit from net loss

For the year to June 30, MHP reports an increase of 14% in revenue to US$989 million compared with the same period of 2020. 

At US$502 million, revenue for exports for the six months jumped 11% year-on-year. As a proportion of total revenue, exports so far this year are one percentage-point behind last year at 51%.

Registering an 85% increase from 2020, operating margin rose to US$255 million. Meanwhile operating margin was up 10 percentage-points year-on-year at 26%. 

For the half-year, MHP has achieved a 55% improvement in adjusted EBITDA at US$334 million. This is reflected in an adjusted EBITDA margin for the period, which rose from 25% to 34%.

As for the quarter, foreign exchange differences affected MHP’s net profit for the half-year.

Whereas the company recorded a net loss of US$62 million for the period in 2020, this year’s figure is a net profit of US$232 million. MHP comments that this is mainly attributable to a non-cash foreign exchange gain in the first half of 2021. For the same period of 2020, the company reported a US$129-million foreign exchange loss.

Before foreign exchange differences, net profit was US$182 million. This compares with US$67 million for the first half of 2020.

MHP expanded chicken production

Recovering from disease challenges, MHP previously reported positive developments in its overall poultry production, as well as third-party sales for the first half of the year.

Among the highlights for the May-June quarter of 2021, MHP’s poultry meat output was up 5% year-on-year at 190,908 metric tons (mt). With its production volume of 29,455mt, the firm’s European Operating Segment (Perutnina Ptuj) achieved a 13% increase in output. Exports for the period were up 23% year-on-year at 109,055mt.

At 357,531mt, MHP produced 2,400mt less chicken during the half-year 2021 than in the corresponding period last year. However, output by its European business was 54,117mt — an increase of 4,800mt year-on-year.  

More on MHP

With annual slaughterings last year estimated at 478 million birds, MHP (formerly Myronivsky Hliboproduct) is now the second largest poultry company in Europe, according to WATTPoultry.com’s Top Poultry Companies database.

Accounting for approximately 30% of all industrially produced chicken meat consumed in Ukraine in 2019, MHP is the country’s leading poultry producer. The group exports chicken products to more than 80 countries, and poultry accounts for around half of the company’s total revenue. Other significant businesses include grain and oilseed production.

Two months ago, MHP set out its progress on sustainability during 2020, and its goals for 2021. Animal welfare and food safety continue to be key focus areas.

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