11:31 23.05.2017

MHP posts $57 mln in net profit in Q1 2017

3 min read
MHP posts $57 mln in net profit in Q1 2017

MHP S.A., one of the leading agro-industrial companies in Ukraine, focusing on the production of poultry and cultivation of grain, posted $57 million in net profit in the first quarter of 2017 against $56 million in net loss in the first quarter of 2016.

MHP's revenue of $279 million, increased by 27% year-on-year (Q1 2016: 220 million), while export revenue amounted to $164 million, 59% of total revenue (Q1 2016: $115 million, 52% of total revenue), the company said in an update on the London Stock Exchange on May 23.

Operating profit of $74 million, increased by 3%; operating margin was 27% compared with 33% in Q1 2016, gross profit was 8% up to $86 million from January-March 2016.

Adjusted EBITDA margin declined to 33% (Q1 2016: 41%) mainly driven by significant IAS 41 effect in Q1 2016 compared to Q1 2017 related to increased stocks of poultry meat in Q1 2016 and higher sales volumes of grains in Q1 2017

January through March 2017, EBITDA grew by 2%, to $93 million.

MHP's net debt amounted to $1.063 billion against $1.225 billion in the same period of 2016.

MHP reported that in May 2017 it successfully completed a new eurobond issue of $500 million 7.75% Senior Notes due 2024. $254 million of the proceeds from the new issue were used to repurchase $245 million of the company's 8.25% Senior Notes due 2020. The balance from $500 million will be used to repay certain other debt, to finance the expansion and diversification of MHP's poultry and grain business and to improve liquidity.

MHP also shared its outlook for 2017.

"With a strong start of export sales of chicken meat in Q1 2017, in 2017 MHP plans to export around 220,000 tonnes of poultry to the countries of the MENA, the EU, Africa and CIS with a market targeting approach," it said in the statement.

Several months ago MHP started the construction of Phase 2 of the Vinnytsia complex - Line 1 of 130,000 tonnes total capacity, which is going to be launched in the middle of 2018. Expected production is at around 40,000 tonnes in 2018.

In addition, construction of an alternative energy project at the Vinnytsia complex has already started.

Having completed the company's spring sowing campaign and taking into account weather conditions in general, MHP's outlook for the 2017 harvest of crops is positive.

"We are confident that, with our vertically integrated business model, we will continue to deliver strong financial results, supported by a significant and growing share of hard currency revenues from exports of chicken, oils and grain," the company said in the statement.

As was reported, MHP in January-March 2017 sold 123,931 tonnes of chicken meat, which was 15% up year-over-year.

MHP (Myronivsky Hliboproduct) is the largest poultry producer in Ukraine. It is also engaged in production of grains, sunflower oil, and meat.

MHP's net profit in 2016 was $69 million against $113 million in net loss in 2015. Its revenue grew by 7%, to $1.135 billion.

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