MHP's Chicken Sales up Eight Per Cent for Half-Year

UKRAINE - MHP's latest trading update points to decent harvests and a double-digit increase in chicken sales in the last quarter.
calendar icon 25 July 2011
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MHP S.A., one of the leading agro-industrial companies in Ukraine, has announced its pre-close trading update for first six months of the year ending 30 June 2011.

During the second quarter of 2011, the volume of chicken meat sales to external consumers increased by 14 per cent to 97,800 tonnes when compared to the second quarter of 2010, and by eight per cent to 182,100 tonnes during the first six months of 2011, mainly as a result of the production increase due to more effective use of existing capacity.

Demand for chicken meat during the first half of 2011 remained high and the Company was able to sell close to 100 per cent of the chicken produced.

The average chicken meat price through the second quarter of 2011 increased slightly by one per cent to 13.97 hryvna (UAH) per kg of adjusted weight (excluding VAT) when compared to second quarter of 2010. H1 2011 prices for chicken meat increased slightly by two per cent compared to H1 2010, from UAH13.13 per kg to UAH13.44. These trends are in line with global poultry market trends.

In Q2 2011, 38,600 tonnes of sunflower oil were sold mainly for export at an average price of US$1,301 per tonne, which was an increase of 62 per cent on Q2 2010 (US$809 per tonne). In H1 2011, 84,500 tonnes of sunflower oil were sold at an average price of US$1,303 per tonne, which was an increase of 58 per cent on H1 2010 (US$830 per tonne).

In line with management expectations, MHP's poultry production costs in the second quarter and the first half of 2011 were relatively higher year-on-year due to the increase in the market price for grain harvested in 2010.

In regard to grain-growing operations, currently the Company cultivates approximately 280,000 hectares of land under control and expects to harvest an additional 100,000 hectares in 2011 compared to 2010 in its grain-growing segment.

The Company recently began harvesting wheat and barley. Despite concerns over weather conditions it expects yields to be good enough and significantly higher than Ukraine's average, due to operational efficiency and employment of best practice.

The Company forecasts strong harvest and yields for corn and sunflower, taking into account current crop conditions.

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