MHP releases Q3 2016 operating report

18 October 2016

In reporting period total poultry sales volume made 166.3k tons, by 11% higher than in Q3 2015, while export sales surged by 70%. Taking into account good operating results, positive information about new crops, relatively good financial performance can be expected in reporting quarter.

Q3 2016 Q3 2015 Change, % 9m 2016 9m 2015 Change, %
Poultry sales, k tons 166.3 150.3 10.6% 433.1 407.7 6.2%
thereof export, k tons 58.6 34.5 70.0% 145.2 100.6 44.3%
Price per 1 kg, UAH 30.2 27.6 9.4% 29.7 26.9 10.4%
Vegetable oil sales, k tons 99.9 77.0 29.7% 278.0 227.7 22.1%

Total poultry sales of MHP in 9m 2016 made 433.1k tons (+6% y-o-y). The share of export in total realization volume made 33.5%, in natural terms export made 145.2k tons (close to 80% of total Ukrainian poultry export, +44% vs. 9m 2015). In report it is noted that export volumes to Middle East grew in last nine months by 47%, EU by 35%, Africa by more than 4 times. MHP keeps development of its sales&distribution center in UAE and increases processing volumes in Netherlands.

Domestic poultry sales of the company declined by 7% in last report quarter and by 6% in 9m2016, which is not important factor, basing on our view, as main objective of MHP at the moment to develop export operations. Taking into account dominant positions of the company on domestic market, we have little concerns regarding MHP ability to take back its domestic market share.

Additional positive factor mentioned in report is increase of vegetable oils production and sales: sunflower oil realization grew by 25% (89.6k tons in Q3 2016), soybean oil by 2 times (10.3k tons). At the moment MHP soybeans crushing capacities are loaded by 80% vs. 50% in the beginning of current year. Export accounts for 100% of vegetable oils realization.

As was expected, positive news come from agri- business segment of the company. According to report wheat yield in current season made 6.4t/ha (6.0t/ha in MY2015/16), sunflower seeds yield 3.4t/ha (3.1t/ha). Up the moment corn is harvested from 55% of total area, reported yield is 9.4t/ha (6.8t/ha a year ago, difference in money terms is close to USD 40M, corn accounts for about 40% of total area of the company). Basing on presented figures increase of segments profitability is expected.

Financial report of MHP for 9m2016 is to be published on November 15.

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