The agricultural holding Myronivsky Hliboproduct (MHP) saw a net loss of $47 million in July-September 2020 versus a net profit of $104 million for the same period in 2019.
According to the quarterly financial statements of the holding, published on the London Stock Exchange on Wednesday, its revenue in the third quarter decreased 2%, to $547 million, and EBITDA fell by 3%, to $106 million.
MHP’s gross profit grew by 10%, to $103 million, operating profit – by 40%, to $56 million.
MHP said that over the specified period, export revenue decreased 2.5%, to $309 million, which is 56% of total revenue (in the third quarter of 2019 it was 57% of total revenue).
The agricultural holding explained its net loss indicator for the third quarter of 2020 by a non-cash foreign exchange loss of $61 million compared to a profit of $109 million for the same period in 2019. Thus, net profit before foreign exchange differences in the reporting period of 2020 amounted to $82 million, which is 11% lower compared to $92 million in the third quarter of 2019.
In general, in January-September 2020, MHP’s revenue decreased 6%, to $1.41 billion. MHP saw $109 million in net loss versus $276 million in net profit in the first nine months of 2019, which is associated with a non-cash foreign exchange loss of $191 million in January- September 2020 compared to 9M 2019 profit of $182 million.
EBITDA for the specified period fell by 7%, to $332 million, gross profit – by 7%, to $322 million, and operating profit – by 11%, to $194 million.
MHP CFO Viktoria Kapeliushna told Interfax-Ukraine on Wednesday that the second wave of the coronavirus crisis in Ukraine and Europe did not affect the logistics chains, but the company sees a decrease in demand in HoReCa, which in turn is offset by an increase in demand in other sales channels.
“Because of the coronavirus crisis, we did not revise our plans, but we revised our forecasts. Lockdown affected global prices for chicken, we can feel it,” she said.
Kapeliushna said that the company revised its EBITDA forecast at the end of the year downward. It is expected to be 5-10% below the 2019 level.
“The first nine months of 2020 have been extremely challenging, with the disruptive effects of the COVID19 pandemic, avian influenza in Ukraine which resulted in the temporary closure of some export markets in the first quarter, over-supply and resulting high stock levels in European markets, lower poultry prices globally, crop yields adversely affected by the worst weather conditions in central Ukraine for at least 30 years, and volatile exchange rates,” the MHP said in the press release.
The company said that although the outlook for the fourth quarter is as yet unclear, we expect increasing grain prices and the continuing rebalancing of poultry sales to more profitable export markets to largely offset the effects of lower poultry prices in Europe.
“Longer term, we expect poultry prices in our major markets to adjust gradually in response to increased production costs driven by higher grain prices. The company also expects to derive increasing benefit from its shift towards a more value-added strategy and the development of antibiotic-free products to be sold initially under its Nasha Ryaba brand,” MHP said.
MHP is the largest chicken producer in Ukraine. It is also engaged in the production of cereals, sunflower oil, meat products. MHP supplies the European market with chilled half-carcasses of chickens, which are processed, including at its factories in the Netherlands and Slovakia.
