MHP increases EBITDA 42% in 2014, declares DPS of USD 0.47

Ukraine’s largest poultry producer MHP (MHPSA, MHPC LI) enjoyed a 42% yoy jump in EBITDA to USD 555 mln in 2015. This is despite a revenue slide of 8% you to USD 1,379 mln as the hryvnia devaluation outpaced the lagging poultry price increase, and the bottom line came in negative at USD 412 mln. This is compared to a net profit of USD 162 mln a year before, driven by a USD 778 mln in forex loss.

An 18% yoy increase in poultry sales to 526 kt in 2014 was among the positive EBITDA drivers. The company had managed to steer the poultry selling price up 25% in 2014 to UAH 19.99/kg. In 4Q14, the average selling price was even higher at UAH 23.72/kg (+54% yoy, +7% qoq). EBITDA of grain growing segment leaped 134% yoy to USD 97 mln in 2014, driven by better yields and a growing profitability of farming due to hryvnia devaluation (EBITDA per hectare increased 116% yoy to USD 294).

The company’s net operating cash flow advanced 28% yoy to USD 254 mln in 2014, but net operating cash flow as a portion of EBITDA has worsened to 46% from 51% a year ago, following a USD 156 mln working capital outflow. CapEx came in at USD 129 mln in 2014, thus having halved yoy.

MHP’s net debt increased 3% throughout 4Q14 to USD 1.1 bln, but net debt to LTM EBITDA improved somewhat to 2.01x as of December 2014 from 2.05x as of September 2014, driven by EBITDA increase. The company indicated investments for 2015 will include construction of a new breeding facility, expansion of Myronivka poultry farm and a soybean crushing plant, which will be launched in September 2015.

The board of directors approved a payment of dividends at USD 0.47429 per share, with a record date of May 8 and payment date of May 14. This implies a 4.2% dividend yiled, based on yesterday’s close price of MHP stock.

Roman Topolyuk: MHP reported a set of superb financial results, having exceeded our 2014 EBITDA projection by 13%. Despite the challenging macroeconomic environment, the company’s operating and financial performance might gain momentum in 2015, as poultry price inflation will catch up and MHP’s poultry farms will operate at their full capacity. We think the indicated CapEx program for 2015 is not likely to create any hazards for MHP’s balance sheet, and could be funded from its own net operating flow. After repayment of USD 234 mln Eurobonds on Apr.29, the company will face moderate banking debt redemption in 2015 of USD 81 mln.

The solvency position of MHP remains solid - we project net debt to EBITDA of 1.7x by the end of 2015. We reiterate our positive view on MHP bond. Based on our projections, MHP stock is trading at 4.6x forward looking EV/EBITDA, which is below its historical average of 5.9x.

Источник: Конкорд Капитал