MHP Agroholding, Ukraine’s largest chicken producer, managed to make $38 million in net profit in the fourth quarter of 2022, 2.4 times better than in the fourth quarter of prewar 2021.
The agriholding said in its annual report to the London Stock Exchange on Tuesday, while it ended the year as a whole with a net loss of $231 million, compared with $393 million in net income in the previous year.
According to the report, MHP’s revenues in the fourth quarter of 2022 increased by 6% to $766 million, and for the year as a whole, by 11% to $2 billion 642 million.
Including export revenue for the quarter reached 64% ($491 million) compared to 61% ($1 billion 601 million) for all of 2022 and 53% ($1 billion 265 million) for all of 2021.
“The war in Ukraine is ongoing and could escalate in the coming months. There are constant risks to the company’s operations due to repeated attacks on critical infrastructure in Ukraine. However, as of today, all of MHP’s production facilities in Ukraine continue to operate at nearly full capacity. After transforming its logistical arrangements in response to changing wartime circumstances, the company is once again exporting to more than 70 countries worldwide, supplying grain, vegetable oils and poultry around the world,” the document states.
According to it, to date, MHP facilities have suffered no physical damage as a result of the war.
At the same time, the group has incurred significant war-related expenses since the Russian invasion on Feb. 24, 2022, estimated at $69 million for the year ending Dec. 31, 2022. They include donations in support of the community, write-offs of stockpiles and biological assets, and other specific expenses related to the war. Specifically, MHP donated about 12,000 tons of poultry products to the people of Ukraine.
It is specified that the operating profit in the fourth quarter of last year decreased by 12% – to $90 million, and for the year – by 49%, to $255 million, EBITDA – respectively by 16%, to $109 million and by 41%, to $384 million.
As noted, in January-March 2023, the agricultural holding managed to almost fully maintain production capacity.
“Since the overall situation in Ukraine remains unstable, we cannot give any meaningful forecasts about the prospects of the poultry segment for the whole of 2023. In the grain segment, the spring sowing season starts this month. Since all of our land is outside of the war zones, we hope to be able to harvest the same 360,000 hectares as we did in 2022,” MHP also pointed out.
According to the report, given the current risks and uncertainties following the Russian invasion of Ukraine and the resulting need to preserve liquidity to support ongoing business operations and support the country’s population, MHP’s board has decided that dividend payments are unlikely while the war continues.
