MHP sees EBITDA of around USD 510 mln in 2015

Ukraine’s largest poultry producer MHP (MHPC LI, MHPSA) sees its EBITDA at USD 500-520 mln in 2015, compared to USD 555 mln reported in 2014, according to management. This guidance was announced during a conference call on Apr. 29. The expected profit decrease is due to last season’s corn harvest, which was 40% yoy more expensive in hryvnia terms.

The company expects its poultry production to reach 600 kt in 2015, up 10% compared to 2014. About 30% of its chicken meat sales will be exported. Last year the figure was 27%.

The company reported its operating figures for 1Q15 on Apr. 30, with poultry production increased 2% yoy to 140.3 kt and poultry sales were up 1% yoy to 113.6 kt, including domestic sales of 87.6 kt (up 7% yoy). The average poultry price increased 63% yoy to UAH 25.35/kg.

MHP’s total CapEx in 2015 will reach USD 150-170 mln, according to management outlook, covering the construction of new breeding facilities at the Peremoha and Starynska facilities. It will also cover the expansion of another poultry production line at its Vinnitsa factory and construction of its own soybean processing plant. The company expects to launch hatching production capacities and its soybean plant in 2H15. Construction of a third poultry line is also planned and may begin by the end of 2015. The latter project is to be implemented by mid-2017 with a total cost of USD 130 mln, and will be financed by export credit agencies and from MHP’s own operating cash flows. MHP also has voiced that it is studying opportunities for increasing its land bank.

MHP expects that it will need USD 120-130 mln for working capital purposes in 2015. The company might obtain another PXF loan of USD 170 mln this year.

Roman Topolyuk: MHP is set to deliver another year of strong financial results in 2015, in terms of EBITDA (though coming in 6-10% lower yoy). However, its net operating cash might decrease by 25% yoy to USD 190 mln due working capital needs. The planned CapEx and scheduled banking debt redemption of around USD 81 mln by the year end will not allow MHP to rely solely on its own operating cash flow, but we do not think it should have any trouble rising banking debt.

We increase our projection of 2015 net debt to EBITDA from 1.7x to 2.2x, which is still comfortable compared to the Eurobond covenant of 3.0x. The announced possible increase of the land bank can push this ratio upwards, but as of now we reiterate our positive view on MHPSA bond.

Источник: Конкорд Капитал