News update:Mar 9, 2016

Ukraine: MHP plans to recover revenue

Ukraine’s biggest poultry producer MHP, expects this year’s Ebitda to be unchanged from 2012, after a first-quarter decline, by boosting chicken production and planting more grain.

“We have drivers for stabilisation,” said MHP Chief Financial Officer Viktoria Kapelyushnaya after the company published its first-quarter results. “We will produce more chicken and more grain. Despite the difficult conditions we have in Ukraine, we will have a stable result this year.”

Earnings before interest, tax, depreciation and amortization fell US$13 to US$73 million in the last quarter, while average chicken meat prices fell 3%, the company said in the recent statement. Net income dropped 24% to US$36 million as the cost of grain rose.

Ukraine exited a six-month recession in the first quarter when the economy rose 0.5% from the preceding three-month period. Gross domestic product shrank 1.3% from year ago and industrial output fell 5% Inflation declined annual 0.8% and did not change in April from March.

MHP has a “conservative forecast” and expects chicken prices to stay at the same level by year’s end, Kapelyushnaya said. “The cost has risen, but inflation is unchanged.”

MHP expects to cut poultry costs after the Vinnytsya facility starts operating to full capacity and helps push the cost further down by the end of 2013 and 2014, Kapelyushnaya said.

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