MHP increases poultry sales 18% yoy in 2014

Ukraine’s largest poultry producer MHP (MHPC LI, MHPSA) increased its poultry sales to 128.7 kt in 4Q14 (+6% yoy, -11% qoq), according to its Feb. 2. trading update. That led to annual poultry sales of 526 kt in 2014, or 18% higher yoy. The growth was driven by the launch and ramp up of its Vinnytsia production complex. MHP stated its average selling price of poultry totaled UAH 23.72/kg in 4Q14 (+7% qoq in UAH terms; about USD 1.4/kg), thus the annual average price in 2014 grew to USD 19.99/kg (+25% yoy in UAH terms), driven by an increase in domestic prices and relatively stable share of exports (27% in 2014, compared to 28% in 2013).



MHP also reported it harvested 2.03 mmt of crops (+2% yoy), including 1.18 mmt of corn (+4% yoy) in 2014. The company’s meat processing volumes fell 6% yoy to 31 kt in 2014, while selling prices in the segment grew 20% yoy to UAH 28.28/kg (USD 2.35/kg).



Roman Topolyuk: The operating performance of MHP’s key business segment, poultry production, fell short by 3% of meeting our expectations, with an unexpected decrease in sales in 4Q14, on a q/q basis. Nevertheless, this result brings MHP to another annual record production, which was driven by the expansion of its capacities. The company demonstrated its ability to pass onto its customers half of the hryvnia devaluation, which will mitigate the negative effects on its top line.



We expect MHP will report EBITDA of USD 501 mln in 2014, while its bottom line will be nominally negative at a USD 319 mln loss, due to non-cash FX losses. This implies the company’s net debt/EBITDA ratio would have been close to 2.0x as of end-2014, which is way below its Eurobond covenant of 3.0x. The company thus should be easily able (without breaching its leverage covenants) to take its planned refinancing from IFC (at minimum, USD 200 mln, we expect) to repay its USD 235 mln Eurobond in April.

Источник: Конкорд Капитал