Ukrainian poultry producer, MHP, has reported strong second quarter results despite the troubles occurring in the country and in the Crimea in particular.
During the first half of the year all the company's chicken production facilities (including those in Crimea) continued to operate at full capacity with no changes in operations. Currently the Vinnytsia poultry farm operates at full capacity on 10 rearing sites (out of 12); the last 2 sites will be brought into production during the second half of 2014, the company announced in a statement.
The volume of chicken meat sales to third parties (domestic and export) in H1 2014 increased by 23% year-on-year to 251,990 tonnes due to the increased production at the Vinnytsia poultry farm.
Due to strong domestic demand, MHP's sales volumes in Ukraine in H1 2014 increased by around 30% year-on-year. In H1 2014 poultry export increased by 4% year-on-year to57,560 tonnes, which constituted 23% of total poultry sales, mainly due to an increase to the Middle East, Northern Africa and some CIS countries. MHP's exports to Custom Union countries have been banned since February 2014 but have been redirected successfully to other regions.
Since October 2013 MHP has started exporting chicken eat to the European Union countries and since June 2014 we continue exporting poultry with zero import duty and gradually increasing volumes.
In July Yuriy Kosyuk resigned from the position of CEO of MHP following his appointment by the President of Ukraine to the post of First Deputy Head of the Presidential administration. The Board appointed Yuriy Melnyk as CEO of MHP.
Commenting on the results, Yuriy Melnyk, Chief Executive Officer of MHP, said: "Having worked as a First Deputy CEO of MHP for the last four years, I am honored to take up the charge of CEO of the Company in this challenging period for Ukraine and for the Ukrainian people.
I believe that the skills and the experience I have acquired, together with the determination to further develop our Company in line with its strategy and with the help of a strong team will allow us to deliver solid performances.
In my first report to shareholders as CEO, I am pleased to report a strong performance by MHP in the first half of 2014. The Company continued to increase its overall production volumes, which resulted in significantly increased sales of poultry (both in Ukraine and for export) and sunflower oil.
Despite the introduction of an import ban by the Customs Union in February 2014, and following our strategy of export diversification, MHP increased poultry sales across all regions, so that export chicken sales volumes during H1 2014 slightly increased by 4% year-on-year. The preferential regime of zero import duty by the EU, which came into effect in June 2014, will bring new opportunities for MHP in Europe, which we have already started to develop.
Notwithstanding the temporary suspension in operations of the Shahtarska poultry farm, which is responsible for the production of hatching eggs, our management has taken all necessary steps to allow MHP's operations to continue to run smoothly."