PRE-CLOSE TRADING UPDATE FOR THE FOURTH QUARTER AND TWELVE MONTHS ENDED 31 DECEMBER 2018

24.01.2019

 MHP SE (LSE: MHPC), the parent company of a leading international agro-industrial group with headquarters in Ukraine, focusing primarily on the production of poultry and cultivation of grain, as well as other agricultural operations (meat processing and meat products ready for consumption) today announces its pre-close trading update for the fourth quarter and twelve months ended 31 December 2018. Hereinafter, MHP SE and its subsidiaries are referred to as “MHP”, “The Company” or “The Group”.

POULTRY AND RELATED OPERATIONS

Since Q2 2018, MHP has launched the production sites of Phase 2 of the Vinnytsia Poultry Complex (‘Complex’): three rearing sites (brigades) and a slaughterhouse of the Complex, gradually increasing its capacity utilization in H2 2018.

As usual, other Company’s poultry production facilities continued to operate at full capacity during the period.

Poultry production volumes in Q4 2018 increased by 13% to 159,431 tonnes (Q4 2017: 141,544 tonnes) and in 12M 2018 increased by 9% to 617,943 tonnes (12M 2017: 566,242 tonnes) due to increased production of heavier chicken and decreased share of thinning as well as due the launch of new rearing sites of Phase 2.

Poultry

Q4 2018

Q4 2017

% change

12M 2018

12M 2017

% change

Sales volume, third parties tonnes:

144,183

113,746

27%

593,527

532,727

     11%

 

-       Domestic

 

71,253

68,704

4%

306,680

311,743

-2%

-       Export

72,929

45,042

62%

286,846

220,983

30%

 

Annual sales of chicken meat increased by 11% to 593,527 tonnes in line with marketing and growth strategy of exports. Annual poultry sales on the domestic market (both fresh and frozen) remained relatively stable year-on-year. 

Poultry Exports

In Q4 2018 the volume of chicken meat exports increased by 62% to 72,929 tonnes and 12M 2018 increased by 30% to 286,846 tonnes year-on-year, following the strategy of increasing export sales in general and driven by significant exports in H2 2018 in particular, mainly to KSA, Slovakia, Iraq and the Netherlands. MHP continued to follow a strategy of both geographic diversification and a product mix optimization building-up its export volumes of chicken meat mainly in the EU and MENA countries. Out of total poultry sales volumes, poultry exports in 12M 2018 constituted around 48% vs 41% in 12M 2017.

The Dutch and Slovakian processing plants and sales/distribution office in the UAE have been performing in accordance with expectations and their business plans.

Poultry Prices

Poultry

Q4 2018

Q4 2017

% change

12M 2018

12M 2017

% change

 

 

 

 

 

 

 

Price per 1 kg net VAT

40.56

40.71

0%

39.86

35.63

12%

 

* Average official FX rate for Q4 2018 UAH/US$ 27.95 and for Q4 2017 UAH/US$ 26.96

   Average official FX rate for 12M 2018 UAH/US$ 27.20 and for 12M 2017 UAH/US$ 26.59  

 

Through the fourth quarter of 2018 the average chicken meat price (mixed domestic and export) remained relatively stable and constituted UAH 40.56 per 1 kg of natural weight (excluding VAT). In 12M 2018 average chicken meat price increased 12% year-on-year to UAH 39.86. The increase in price year-over-year is mainly driven by export price growth as a result of product mix optimization undertaken by the Company in line with its export strategy as well as an increase in fresh poultry prices in Ukraine.

In USD term, average MHP’s poultry prices in Q4 2018 decreased by 5% year-on-year and in 12M 2018 increased by 9% year-on-year.

Vegetable Oils

Sales volume, tonnes

Q4 2018

Q4 2017

% change

12M 2018

12M 2017

% change

Sunflower oil

74,108

67,569

10%

315,079

311,393

1%

Soybean oil

12,268

4,755

158%

50,044

27,282

83%

 

In Q4 2018, MHP’s sales of sunflower oil increased by 10% year-on-year to 74,108 tonnes. In 12M 2018 sunflower oil exports remained stable year-on-year and constituted 315,079 tonnes as a result of delivery terms change and increased stocks of sunflower oil, which will be sold in Q1 2019.

 

In Q4 2018, soybean oil export sales increased by 158% year-on-year to 12,268 tonnes, and accumulatively for 12M 2018 increased by 83% to 50,044 tonnes, partially as a result of the push back of the contract for approx. 6,000 tonnes of oil to January 2018 from Q4 2017 and low base in 12M 2017.

 

MHP also sells soybean cake to third parties.

Using internally produced sunflower and soybean meals as a key component of fodder, the Company considers vegetable oils exports as one of the “natural hedge” routes accumulating additional hard currency revenues and protecting the Company from volatilities in local currency.

GRAIN GROWING OPERATIONS

In 2018 in grain growing operations the Company harvested around 363,000 hectares of land and gathered 2,654,622 tonnes of crops, which is around 33% higher than in 2017 mainly due to strong and MHP’s historically record harvest of corn.

MHP has around 94,000 ha under winter crops, of which around 50% is sowed with winter wheat and 41% with winter rapeseeds. All winter crops are in good conditions.

2018

 

2017

 

 

Production, tons

 

Cropped hectares

 

Production, tons

Cropped hectares

 

 

 

Corn

1,344,547

 

123,398

 

893,149

121,908

Wheat

295,640

 

48,379

 

293,765

48,676

Sunflower

235,245

 

72,981

 

205,079

68,931

Rapeseed

125,346

 

38,541

 

104,782

31,968

Soya

114,322

 

37,558

 

82,793

39,684

Other[1]

539,322

 

41,964

 

pdf TU Q4 and 12M 2018  Download >

Все пресс-релизы