MHP reports higher sales, profit for 2021

In the 2021 financial year, Ukraine-based agri-food group MHP reported double-digit increases in revenue, which led to significant growth in profitability.

(Courtesy MHP)
(Courtesy MHP)

According to CEO and founder, Yuri Kosyuk, MHP Group delivered exceptional performance in 2021. 

Commenting on the fourth quarter and full-year results to December 31, 2021, he attributed this success to a combination of favorable weather condition resulting in a record harvest, as well as strong prices for both poultry products and grains. 

Financial highlights: increased revenue, profitability

For the full year of 2021, MHP reports a 24% increase in overall revenue to US$2.372 billion.

While this was driven primarily by increased meat sales, this improvement also reflects a 25% rise in exports to US$1.265 billion. This international trade accounts for 53% of MHP’s overall sales.

At US$506 million, operating profit for the 12 months was 152% higher than in 2020. Meanwhile, the group achieved a 10-point increase in operating margin to 21%. 

Strong performance in the firm’s grain business was the main driver of an increase in profitability. 

Expressed as adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA), the group reported a figure of US$648 million, and an EBITDA margin of 27%. For comparison, adjusted EBITDA was US$340 million.

Compared with a net loss of US$133 million in 2020, MHP delivered a net profit of US$393 million for the year just ended. 

MHP expanded chicken meat output in 2021

In 2021, MHP’s poultry production from Ukraine was 3% higher year-on-year at around 754,400 metric tons (mt). For its European Operating Segment – Slovenia-based Perutnina Ptuj (PP) — output volume was 10% higher than in the previous year at just under 112,000mt. 

Over last year, chicken prices averaged US$1.67 per kilo for the firm’s Ukrainian products, and EUR2.59 (US$2.73) for PP. 

Last year, both of the poultry operations gained export trade. For MHP’s Ukraine business, exports were up 8% at almost 402,400mt. Meanwhile, PP almost doubled its international trade to more than 33,400mt

These figures refer to chicken meat (excluding byproducts), and are exclusive of tax.

MHP completed its acquisition of PP in 2019. 

MHP's performance by business segment

For MHP’s domestic poultry operations, sales in 2021 were 1% higher year-on-year at 704,010mt. While export volume was up 8% at 402,388mt, domestic sales were 11% lower than the previous year at 288,831mt. Average prices were 25% higher for all Ukrainian poultry sales, and 19% higher for internationally traded products. At US$1.224 billion, revenue for this segment was up by 20% year-on-year.

Meanwhile, MHP’s meat processing business in Ukraine increased its third-party sale by 4% year-on-year to almost 34,000mt, and at a 16% higher average price. In the same segment, convenience food sales prices achieved an average increase of 22%, but sales volume was 5% lower at 18,857mt. While revenue for these operations was 22% higher than the previous year at US$176 million, adjusted EBITDA tumbled by 45% to US$11 million.

While the average price of poultry meat produced by MHP’s European operating segment (PP) was just 3% than for the previous 12 months, its poultry sales to third parties was 16% higher year-on-year at around 72,800mt. It sold 4% more processed meat products to third parties in 2021 — at 40,366mt — at an average price 2% higher. These improvements led to 20% increases in both overall revenue and adjusted EBITDA by this segment compared with 2020.

In 2021, MHP harvested a total of around 2.6 million metric tons (mmt) of crops and grains. This is 52% more than in the previous harvest season, due to favorable weather conditions and the benefits of modern technology, MHP reports. Main crops were corn (maize; 1.62mmt), sunflower (280,000mt), wheat (216,000mt), rapeseed (71,000mt), soybeans (57,000mt), and 349,000mt of other crops. 

In terms of vegetable oil production, MHP’s sales of sunflower oil were down 37% year-on-year, and those of soybean oil were 11% higher. This shift was largely attributed to a change in feed formulation by MHP, which resulted in a partial substitution of soybean oil for sunflower oil in poultry diets. The change resulted in a 39% increase in MHP’s revenue from vegetable oil sales to US$383 million for 2021.

More on MHP

In April, MHP reported its first-quarter results for the current year. The report focused on logistical and infrastructure challenges experienced by the group since the Russian invasion of Ukraine in February. 

Among these were the destruction of a warehouse and poultry meat stored there by Russian shelling, and MHP has suspended operations at its Ukrainian Bacon plant.

In its 2021 annual report, MHP reports its responsibility to contribute to the food security of Ukraine. To this end, the group has continued its operations despite significant difficulties and disruptions caused by Russia’s invasion of the country. Since the beginning of the war, the company says it has worked hard to manage the logistical challenges and provide aid to the people of Ukraine. As well as other food, equipment, vehicles, and diesel, MHP has provided around 11,000mt of poultry products free-of-charge as part of its humanitarian mission.

MHP (formerly Myronivsky Hliboproduct) is the second largest poultry meat producer in Europe, according to WATTPoultry.com’s Top Poultry Companies survey.

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