Quarterly Sales of Poultry Meat Rise for MHP

UKRAINE - Agri-food company, MHP reports higher poultry meat and sunflower oil production by 30 and 37 per cent, respectively, in the first quarter of 2014 than in the same period last year while sales of processed meats to third parties were down by seven per cent.
calendar icon 17 April 2014
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One of the leading agro-industrial companies in Ukraine focusing on the production of poultry and the cultivation of grain, MHP S.A. has presented its pre-close trading update for the three months ended 31 March 2014.

Poultry and Related Operations

Owing to increasing production volumes at the Vinnytsia poultry farm during 2013, MHP’s overall production volumes of chicken meat in Q1 2014 increased by approximately 30 per cent year-on-year. As usual, the Company’s poultry production facilities continued to operate at full capacity during the period.

Poultry Q1 2014 Q1 2013 % change
Sales volume, third parties (tonnes) 112,270 91,720 +22%
Price per kilo (net VAT UAH) 15.61 16.33 -4%


Sales of chicken meat to third parties in Q1 2014 increased by 22 per cent, reaching 112,270 tonnes of chicken meat compared to 91,720 tonnes in Q1 2013. Domestic sales volume increased by 20 per cent while export sales volume increased by 31 per cent.

Export Sales: In line with the Company’s growth strategy of its export sales, during the first quarter of 2014, the volume of chicken meat export increased by 31 per cent and reached 30,370 tonnes. This figure compares with 23,200 tonnes in Q1 2013 despite decreased exports to the Custom Union as since the beginning of February, MHP has been banned from exporting of chicken meat to the Russian Federation as well as to other Custom Union countries (Kazakhstan and Belarus).

During the reporting period, the Company significantly increased its export sales to the Middle East, Asia, Africa, the EU and to some CIS countries, diversifying export markets.

The average chicken meat price through the first quarter of 2014 remained at approximately the same level with prices in Q4 2013 but decreased by four per cent to UAH 15.61 per kilo of adjusted weight (excluding VAT) when compared to Q1 2013.

Average price decreased mostly due to lower export prices year-on-year although export prices in Q1 2014 remained at the level of last months of 2013.

Vinnytsia expansion project

All production sites of the Vinnytsia complex – nine of 12 chicken rearing sites, poultry processing facility and feed mill – are operational and will reach its full capacity closer to the year-end as the three final chicken rearing zones will be added.

Sunflower Oil Sales

In Q1 2014, due to increased production of chicken feed, MHP’s sales of sunflower oil increased significantly by 37 per cent to 67,520 tonnes compared to 49,310 tonnes in Q1 2013.

In line with international trend of the commodity prices, the average price per tonne of sunflower oil fell by 26 per cent to US$853 compared to US$1,149 in Q1 2013.

Sunflower Oil Q1 2014 Q1 2013 % change
Sales volume (tonnes) 67,520 49,310 +37%
Price per tonne (US$) 853 1,149 -26%

Grain Growing Operations

Almost 64,000 hectares of land in Ukraine and more than 8,000 hectares in the Russian Federation are under the winter crops (i.e. winter wheat, rapeseed and barley), which are around 25 per cent of the land cultivated in the grain growing segment of the Company.

Currently, all crops are in good condition. As a result, MHP expects good harvest of winter crops in 2014.

MHP’s 2014 spring sowing campaign is now ongoing.

Other Agricultural Operations

Meat processing products

Sales volumes of sausage and cooked meat in Q1 2014 decreased slightly to 6,856 tonnes compared to 7,340 tonnes in Q1 2013.

The average sausage and cooked meat price in Q1 2014 increased by seven per cent to UAH24.10 per kilo (excluding VAT) compared to UAH22.51 in Q1 2013 as a result of product portfolio re-balancing with the focus on higher-margin products.

Meat processing products Q1 2014 Q1 2013 % change
Sales volume, third parties (tonnes) 6,856 7,340 -7%
Price per kilo (net VAT; UAH) 24.10 22.51 +7%

MHP continues to execute its strategy of increasing the Company’s market share in meat processing products, by using its own chicken meat.

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