MHP, Ukraine’s largest chicken producer, has signed a shareholder agreement to establish a joint venture with Desert Hills Veterinary Services Company Limited (DHV), a subsidiary of Tanmiah Food Company, a leading supplier of poultry and other meat products in the Middle East listed on the Saudi stock market.
“This partnership will allow DHV and MHP to join forces to invest over SAR 200 million (about $53 million at current exchange rates) in farms with a capacity of over 1 million parent flocks, which are expected to produce around 175 million hatching eggs per year, in a state-of-the-art hatchery and poultry feed mill,” MHP said in a statement to the London Stock Exchange on Friday.
Building on the foundation laid by the Memorandum of Understanding signed earlier this year, DHV will hold a 55% stake and MHP will hold a 45% stake in the joint venture.
According to the agroholding, this year MHP and DHV signed a memorandum of understanding to cement their partnership to join forces to develop farms with a capacity of more than 1 million birds, which will produce about 175 million hatching eggs annually. A modern poultry hatchery and feed mill will also be built in Saudi Arabia.
“The deepening of our alliance with Tanmia is a strategic turning point in MHP’s global reach. This partnership symbolizes our shared vision of integrating international expertise with local knowledge and ensuring that Saudi Arabia achieves its food security goals. Our collective strengths will catalyze transformational achievements in the poultry sector, driving innovation and setting new standards of excellence,” said John Rich, MHP Executive Chairman.
“Our collaboration with MHP means more than just a partnership; it reflects our commitment to strengthening Saudi Arabia’s food security system. By leveraging our local knowledge combined with global best practices, our portfolio of first-class products, services and solutions demonstrates our commitment (…) to the broader goals of Vision 2030,” said Zulfiqar Hamadani, CEO of Tanmiah Food Company (a subsidiary of DHV).
According to the report, the signing of the shareholders’ agreement is a crucial step in the establishment of the joint venture after obtaining the necessary approvals, including the permission of the General Authority for Competition of Saudi Arabia and other relevant jurisdictions.
The signing ceremony was attended by Sheikh Amr Al-Dabbagh, Chairman of the Board of Tanmiah Food Company (a subsidiary of DHV), as well as members of the Board and executive management of the company, representatives of the Saudi government, and Ambassador of Ukraine to Saudi Arabia Anatoliy Petrenko. MHP’s Board was represented by Executive Chairman John Rich and Managing Director Yevgeny Levterov.
Tanmiah Food Company is a leading supplier of poultry and other meat products in the Middle East, listed on the Saudi stock market. The company was founded in 1962. Its business model combines enterprises in agriculture, primary processing and marketing of products sold in Saudi Arabia, the UAE, Bahrain, Oman, Jordan and Kuwait. Tanmiah Food Company is the main franchisee of Popeyes Louisiana Kitchen.
As of June 30, 2023, Tanmiah operates 114 farms, as well as six hatcheries, two feed mills and four primary processing plants (slaughterhouses). It sells its products through a network of wholesalers, retailers and food outlets, as well as through its e-commerce platform.
MHP is the largest producer of chicken in Ukraine. It also produces grain, sunflower oil, and processed meat products. MHP supplies chilled chicken half-carcasses to the European market, which are processed, in particular, at its facilities in the Netherlands and Slovakia. In February 2019, the holding completed the acquisition of the Slovenian company Perutnina Ptuj.
In 2021, MHP earned $393 million in consolidated net profit against a net loss of $133 million in 2020, while its revenue increased by 25% to $2.37 billion. In the first nine months of 2022, the agricultural group reported a net loss of $269 million, compared to a profit of $377 million in January-September 2021, and its revenue increased by 14% to $1.88 billion.
In the first quarter of 2023, MHP’s revenue increased by 34.7% compared to the first quarter of 2022 to $745.60 million, and net profit amounted to $49.07 million compared to $108.25 million (at the same time, exchange rate gain amounted to $4.18 million compared to exchange rate loss of $95.32 million).
MHP’s founder, majority shareholder and chairman of the board is Ukrainian businessman Yuriy Kosyuk.
The International Finance Corporation (IFC), a member of the World Bank Group, plans to resume cooperation with MHP, Ukraine’s largest chicken producer, and provide a loan of up to $30 million to its subsidiary Vinnytsia Poultry Farm LLC to finance the modernization and expansion of the plant’s biomethane production capacity from agricultural waste.
According to the IFC website, the corporation’s board of directors plans to consider this project at a meeting on September 19 this year.
It is noted that the company already operates two biogas plants to process manure from its farms into green energy. As part of its decarbonization strategy, MHP plans to increase biomethane production in Ukraine by modernizing and expanding the capacity of its biogas plants in several stages. The first stage, which will be financed under the project, will serve to demonstrate the viability of liquefied biomethane production.
The total cost of the project is estimated at $52 million, and in addition to the IFC loan, MHP expects to finance it with its own funds. It is also expected that the project will be supported by a $15 million guarantee from the European Fund for Sustainable Development Plus, the UK, and other donors.
It is specified that the construction is planned at a biogas plant in the village of Vasylivka (Haisyn district, Vinnytsia region), which was launched in 2019 and is the largest such plant in Ukraine with a capacity of 12 MW.
At the first stage of the project, it is planned to modernize the existing facilities to produce 14 thousand tons of liquefied biomethane per year, and at the second stage – to expand the capacity to 20.5 MW.
IFC specifies that if approved by the board of directors, this will be the corporation’s sixth investment in MHP since 2003, the last of which was opened in 2014 and closed in 2019.
The corporation also points out that since 2018, members of local communities, with the support of a number of environmental organizations, have complained about the investments of IFC and the European Bank for Reconstruction and Development to the CAO (Compliance Advisor Ombudsman). As noted in the CAO’s materials, despite the efforts of all parties, no final solution was found.
In February 2022, the CAO published its final report and referred the case to the Compliance Department. After the case was suspended in Ukraine in March 2022 due to the full-scale war against Ukraine launched by Russia, the CAO resumed its work on the case on October 17 after consultations with stakeholders.
MHP is the largest chicken producer in Ukraine. It also produces grain, sunflower oil, and processed meat products. MHP supplies chilled chicken half-carcasses to the European market, which are processed, in particular, at its facilities in the Netherlands and Slovakia. In February 2019, the holding completed the acquisition of the Slovenian company Perutnina Ptuj.
The founder, majority shareholder and chairman of the board of MHP is Ukrainian businessman Yuriy Kosyuk.
In the first quarter of 2023, MHP’s revenue increased by 34.7% compared to the first quarter of 2022 to $745.60 million, and net profit amounted to $49.07 million against a net loss of $108.25 million (with a foreign exchange gain of $4.18 million against a foreign exchange loss of $95.32 million).
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.
Agricultural holding MHP, the largest producer of chicken in Ukraine, in November 2022 increased production of chicken by 9% to 64.89 thousand tons compared to the previous month, while its sales decreased by 2% to 60.69 thousand tons, according to the report of the agricultural group on the London Stock Exchange on Friday.
It is noted that the volume of chicken production in November 2022 is only 1% behind the same month of pre-war 2021, while its sales exceeded last November’s figures by 1%.
It is specified that the share of chicken exports in November this year increased by 2 percentage points (p.p.) over October 2022, and by 5 p.p. over November 2021, to 60% and 63%, respectively.
A total of 38,39 thousand tons of poultry were exported this November, up 2% from October 2022 and 5% from November 2021.
The domestic market sold 22,31 thousand tons of poultry in November 2022, 10% less than the previous month and 12% more than last November.
The average price of poultry sold in November 2022 decreased 4% to $1.85/kg compared to $1.75/kg (6% less) in November last year.
During the reporting period, MHP reduced sales of processed meat products and semi-finished products by 15% compared to October – to 2.97 thousand tons, and this figure is still 43% lower than in November 2021.
According to the agricultural holding, in November 2022 sales of sunflower oil jumped second to October this year, and by 91% to November 2021, to 51,19 thousand tons, while sales of soybean oil decreased by 89% to October this year and by 64% to November last year, to 0.84 thousand tons.
MHP also noted that this season the holding is harvesting 335 thsd. ha, with sunflower and soybean crops fully completed and corn harvested on 90% of acreage.
MHP is the largest producer of poultry in Ukraine. It is also engaged in the production of grain, sunflower oil, meat processing products. To the European market, MHP supplies chilled half-carcass chickens, which are processed, including at its facilities in the Netherlands and Slovakia. In February 2019, the agroholding completed the acquisition of Slovenian company Perutnina Ptuj.
MHP posted a net profit of $393 million in 2021 versus a net loss of $133 million in 2020, while its revenue rose 25 percent to $2.37 billion.
Ukrainian businessman Yuriy Kosyuk is the founder, majority shareholder and board chairman of MHP.
MHP agricultural holding, the largest chicken producer in Ukraine in October 2022 increased production of chicken by 1% compared to the previous month – to 59.61 thousand tons, while its sales reduced by 2% – to 62.36 thousand tons, according to the statement of agricultural group on the London Stock Exchange on Friday.
It is noted that the volume of chicken production in October 2022 is still 12% behind the same month of the “pre-war” 2021, but its sales exceeded last October’s figures by 11%.
It is specified that the share of chicken export shipments in October this year increased by 4 percentage points (p.p.) over September 2022, and by 3 p.p. over October 2021, to 60%.
A total of 37,69,000 tons of poultry were exported this October, up 6% from September 2022 and 18% from October 2021.
The domestic market sold 24,67 thousand tons of chicken meat in October 2022, 11% less than the previous month but 2% more than last October.
The average price of poultry meat sold in October 2022 was similar to the level of September this year – $1.93/kg, while in October a year earlier it was $1.70/kg (down 14%).
During the reporting period, MHP has reduced the sales of processed meat products and semi-finished products by 9% compared to September – up to 2.97 thousand tons, and this figure is still 40% lower than in October 2021.
According to agroholding, in October 2022 the sunflower oil sales fell by 71% against September this year, and by 51% against October 2021, to 12,800 tons, while soybean oil sales increased by 81% against September this year and by 86% against October last year, to 7,38 thousand tons.
MHP also pointed out that this season the holding is harvesting 335 ths. ha, with sunflower harvesting fully completed, the soybean harvesting is almost finished and corn is harvested on 75% of the area.
The winter crops sowing campaign is completed on about 74 thsd. ha (winter wheat – about 55%, winter rape – about 45%).
MHP is the largest producer of poultry in Ukraine. It is also engaged in the production of grain, sunflower oil, and meat processing products. To the European market, MHP supplies chilled half-carcass chickens, which are processed, including at its facilities in the Netherlands and Slovakia. In February 2019, the agroholding completed its acquisition of Slovenian company Perutnina Ptuj.
MHP posted a net profit of $393 million in 2021, compared with a net loss of $133 million in 2020, while its revenue rose 25 percent to $2.37 billion.
Ukrainian businessman Yuriy Kosyuk is the founder, majority shareholder and board chairman of MHP.
Agroholding MHP in the second quarter of 2022 received $20 million in net profit compared to $232 million in the second quarter of 2021, including excluding exchange rate differences, net profit decreased to $17 million from $201 million.
According to the company’s report on the London Stock Exchange on Wednesday, its revenue amounted to $595 million, an increase of 10% compared to last year.
According to the document, exports accounted for $333 million in revenue, or 56%, while in the second quarter of 2021, $285 million, or 53%.
Operating profit fell 72% to $67 million and adjusted EBITDA (excluding IFRS 16) to $111 million from $277 million in the second quarter last year.
“Despite the fact that MHP continues to face difficult challenges and disruptions in operations, sales and logistics, the company has now been able to restore poultry production at its Ukrainian facilities to almost 100% capacity. In recent months, new, albeit more complex and expensive logistics routes, and export volumes are growing. We expect to complete the grain harvest on almost all of our lands in the second half of the year,” the report says.
According to him, before the end of the year, MHP plans to take advantage of the opportunities of the Cherenomor Grain Initiative for the export of agricultural products.
“The Group incurred significant war-related expenses following the Russian invasion on February 24. For the period ended June 30, 2022, they amounted to nearly $50 million, including donations to support the community, write-offs of stockpiles and biological assets, and other war-related expenses.” , is specified in the document.
At the same time, the company had no material damage to facilities, infrastructure and products in Ukraine, with the exception of the destruction of the leased storage facility (with a loss of about $6 million in production) in March and the suspension of the production of “Ukrainian Bacon” in the Donetsk region, which has now been moved to other locations. in Ukraine.
