26 October 2022
The biggest Ukrainian poultry producer demonstrates resilience in key segments.
Poultry output increased by 2% vs. August and made 59.2k tons. This is the highest monthly production figure since the beginning of the war (but it is still by 9% lower than in September 2021). Poultry production capacity utilization after decrease to 75% in March, in further months recovered to about 85% and then stays relatively stable.
MHP poultry production dynamics during March-September 2022 is presented on the following chart:
Poultry sales volume in September (63.5k tons) have reached their peak since the beginning of the war as well, moreover they reached the level of September 2021.
In total in Q3 2022 MHP poultry sales made 177.4k tons, which is just by 4.4% lower y-o-y.
As for poultry export dynamics, during last several months it looked as follows:
Export of sunflower oil increased significantly – if during summer months on average it comprised 23k tons per month, in September it made 45k tons. It is related to opening of grains corridors in Ukrainian Black Sea ports. Though as a reminder we note that even before grains corridor was opened MHP sunoil export in Y2022 was higher than in previous year.
Taking into account significant difference between inland and export prices for grains in Ukraine, as MHP exports products with rather high added value, we can expect that even in case grains corridor will be closed and situation with export logistics worsen, operating results of MHP will remain on at least satisfactory level.
One of main risks for the company at the moment – potential problems with electricity due to russian missile strikes at Ukrainian energy infrastructure.
MHP keeps harvesting grains. As of reporting date it harvested almost 100% of sunflower seeds, more than 50% of soybeans and 20% of corn, As a reminder, in Y2022 MHP winter wheat yields made 5.5t/ha, rapeseeds – 3.8t/ha.
As a summary, taking into account quite good MHP operating performance in Q3, we can expect improvement of financial performance of the company in reporting period as well.