MHP S.A., one of the leading agro-industrial companies in Ukraine, focusing on the production of poultry and the cultivation of grain, is pleased to announce its pre-close trading update for the three months ended 31 March 2011.

Poultry and poultry-related operations

During the first quarter (Q1) of 2011, the volume of chicken meat sales to third parties increased by two per cent compared to the first quarter of 2010, reaching 84,300 tonnes as a result of the production volume increase due to more effective usage of existing capacity. As usual, all the Company's existing poultry production facilities continued to operate at full capacity during the first quarter of 2011. Consumer demand for chicken remained high and the Company was able to sell close to 100 per cent of the chicken meat produced.

The average chicken meat price through the first quarter of 2011 increased by four per cent to UAH12.83 per kilo of adjusted weight (excluding VAT) when compared to Q1 2010, in line with global meat market trends.

Poultry production costs in Q1 2011 rose slightly in UAH terms compared to Q1 2010 due to the increase of grain and utility prices, which was partially compensated by the lower cost of hatching eggs. Since H2 2010, the Company became self-sufficient in hatching eggs, compared to Q1 2010 when approximately 25 per cent of hatching eggs had to be imported at extra expense.

In Q1 2011, 45,900 tonnes of sunflower oil were sold mainly for export at an average price of US$1,306 per tonne, which was an increase of 54 per cent on Q1 2010 US$850.

Grain growing operations

The Company's winter crops in cultivation on approximately 70,000 hectares are in good condition.

MHP has purchased all seed and fertiliser required for 2011, and is in currently undertaking its spring sowing campaign.

In total, the Company expects to harvest an additional 100,000 hectares in 2011 compared to 2010 in its grain growing segment.

Meat processing products

Following further expansion of the Ukrainian Bacon facility, production volumes of sausage and cooked meat increased by 27 per cent to 7,900 tonnes in Q1 2011 compared to 6,200 tonnes in Q1 2010.

The average sausage and cooked meat price for Q1 2011 increased by seven per cent to UAH18.22 per kilo excluding VAT (Q1 2010: UAH 16.98 per kg.). MHP continues to execute its strategy of increasing the Company’s market share in meat processing products, by using internally produced chicken meat.

Financial results for Q1 2011 will be announced on 12 May 2011.

Further Reading

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