Ukrainian poultry giants are profitable again

MHP

MHP, Ukraine’s largest broiler meat processor, generated a net profit of $67 million against a net loss of $89 million in the first half of 2022, the company said in a statement on the London Stock Exchange. Export revenue surged by 52% to $973 million, the company added.

Ovostar Union

Ovostar Union, a major egg processor, in turn, earned $20.63 million after suffering a net loss of $19.78 in the same period of the previous year, the company said.

Cost of sales in the reporting period more than halved to $23 million, from $47.8 million in 2022. The decrease is explained by the flat dynamics of the prices of main feed components, such as corn and wheat. Another factor is the substantial decrease in the USD/UAH exchange rate, Ovostar Union said.

Ukrlandfarming

There is no reliable information on the financial situation of Ukrlandfarming, previously the largest Ukrainian egg manufacturer. In 2022, the company lost one of its largest poultry farms during hostilities, suffering losses of around $330 million, according to its estimations.

Dark clouds on the horizon

Despite the positive financial results, Ukrainian poultry companies remain strongly concerned over the foreseeable future.

MHP voiced concerns over the restrictions on agricultural imports imposed by neighbouring European countries. MHP’s exports to the EU continue to be reliant on poultry quotas, and any changes to the current regime could pose a significant risk to the company.

MHP also cited a recent comment by the Ukrainian Energy Minister, expecting further electricity shortages in winter due to continued infrastructure challenges. While MHP has made provisions for alternative energy sources for its main operations, significant energy outages may lead to an increase in the cost base as well as a decrease in production across the company’s core products.

In the meantime, Ovostar Union has suspended its investments.

“On the background of the ongoing Russian military invasion in Ukraine and the overall unfavourable situation in the national economy, the management made the decision to put the investment programme on hold,” the company said.

Only minor investments in the production facilities and infrastructure were made in the reporting period, Ovostar Union added, not specifying for what period the investment programme was curtailed.