Business news from Ukraine

UKRAINIAN AGRICULTURAL HOLDING MHP DECREASE REVENUE IN 2020 BY 7%

Myronivsky Hliboproduct agricultural holding (MHP) received a net loss of $133 million in 2020 versus a net profit of $215 million in 2019, mainly due to exchange rate losses of $204 million due to the annual depreciation of hryvnia by 16%, and the company’s revenue decreased by 7%, to $1.91 billion. According to the quarterly financial statements of the holding, released on London Stock Exchange on Wednesday, its adjusted EBITDA and operating income decreased by 7%, respectively, to $395 million and $201 million, while the profitability of sales (EBITDA margin) remained at the 2019 level of 21%.
The agricultural holding noted the impact of exchange rate losses in the amount of $204 million on the company’s financial indicators, saying that excluding exchange rate differences, the company’s net profit in 2020 would have been $71 million against $30 million in 2019.
MHP said that in 2020, export revenue decreased by 9.1%, to $1.015 billion, which is 53% of total revenue (56% of total revenue in 2019).
The agricultural holding said that the situation in export markets has deteriorated significantly due to several outbreaks of bird flu in early and late 2020 and the effect of coronavirus (COVID-19) pandemic throughout the year.
In the fourth quarter of 2020, MHP reduced its net loss by 60%, year-over-year, to $24 million, its total revenue decreased by 10%, to $497 million, and export revenue decreased by 19.3%, to $255 million (51% of total revenue).
MHP’s gross profit in the fourth quarter of 2020 increased by 44%, year-over-year, to $75 million, operating profit amounted to $7 million against an operating loss of $2 million, however EBITDA decreased by 10%, to $63 million.
Chief Executive Officer of the company Yuriy Kosyuk said in the statement that the company managed not only to adapt to the serious challenges of 2020, but also to become more resilient and take advantage of new opportunities. He said that as part of the strategic shift announced a year ago towards more customer-oriented products, including with additional processing and added value, for the domestic market of Ukraine and some export markets, the company launched a number of pilot projects for culinary transformation, including Meat Market convenience stores and DönerMarket houses.
“These offerings are at an early pilot stage and I look forward to updating you on progress in due course as this model is rolled-out more extensively over the next several years, transforming the group’s sales […] to a branded value-added base,” Kosyuk said.
According to the report, revenue for the company’s main chicken production segment in 2020 decreased by 5%, to $1.298 billion, and gross profit due to a decrease in meat prices by 30%, to $191 million, EBITDA by 31%, to $194 million. In the fourth quarter, sales in this segment decreased by 3%, to $328 million, while gross profit and EBITDA due to higher prices for cereals fell 66.7%, to $15 million and $14 million, respectively.
In the crop production segment, MHP’s revenue fell by half in 2020 due to a lower harvest, to $134 million, but due to price increases, gross profit increased 3.2 times to $94 million, and EBITDA by 38%, to $150 million.
In meat processing, sales over 2020 decreased by 3%, to $144 million, while gross profit and EBITDA remained at the same level of $19 million and $20 million, respectively. In the fourth quarter, revenue in this segment decreased by 10%, to $38 million, gross profit by 44%, to $5 million and EBITDA by 38%, to $5 million.
At the same time, the company managed to achieve significant improvement in the performance of Slovenian Perutnina Ptuj and its operations in Croatia and Serbia, which are reported as a European operating segment. Its revenue in 2020 increased by 24%, to $335 million, gross profit by 21%, to $93 million, EBITDA by 25%, to $55 million. In the fourth quarter, sales increased by 12%, to $87 million, gross profit by 5%, to $22 million, and EBITDA remained at $15 million.
In terms of other indicators, the company said that its capital investments in 2020 decreased by 30%, to $79 million, available cash from $341 million to $218 million, and net debt increased from $1.139 billion to $1.244 billion.
In its forecast, MHP said the prospects for the development of poultry farming in 2021 will be very difficult, given the ongoing COVID-19 crisis, weak economic conditions, high feed prices, a very active winter season for bird flu and global oversupply, however the company is confident in its business.
“Transformation to a culinary company: MHP is expanding its focus. The experience of global poultry producers supports MHP’s strategic shift to a culinary company. Moreover, we are transforming our relationship with retail, HoReCa and franchisees in order to reach more customers and meet their evolving needs by providing them with new safe and high quality products. Current challenges have led us to accelerate this strategic shift,” the company said in the report.
The company said that its continued vertical integration provides a significantly lower cost base compared to peers in the industry, as well as improved quality control and better biosecurity of poultry stock, and added that the demand for poultry meat is growing globally along with the decline in demand for red meat.
With regard to possible mergers and acquisitions (M&A), the agricultural holding indicates that it continues to monitor global developments and the potential for mergers and acquisitions. “MHP is well positioned to become an active participant in the ongoing consolidation of the industry,” the company said in the report.
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.

AGRICULTURAL HOLDING MHP ENDS 2020 WITH NET LOSS OF $133 MLN (UPDATED)

Myronivsky Hliboproduct agricultural holding (MHP) received a net loss of $133 million in 2020 versus a net profit of $215 million in 2019, mainly due to exchange rate losses of $204 million due to the annual depreciation of hryvnia by 16%, and the company’s revenue decreased by 7%, to $1.91 billion.
According to the quarterly financial statements of the holding, released on London Stock Exchange on Wednesday, its adjusted EBITDA and operating income decreased by 7%, respectively, to $395 million and $201 million, while the profitability of sales (EBITDA margin) remained at the 2019 level of 21%.
The agricultural holding noted the impact of exchange rate losses in the amount of $204 million on the company’s financial indicators, saying that excluding exchange rate differences, the company’s net profit in 2020 would have been $71 million against $30 million in 2019.
MHP said that in 2020, export revenue decreased by 9.1%, to $1.015 billion, which is 53% of total revenue (56% of total revenue in 2019).
The agricultural holding said that the situation in export markets has deteriorated significantly due to several outbreaks of bird flu in early and late 2020 and the effect of coronavirus (COVID-19) pandemic throughout the year.
In the fourth quarter of 2020, MHP reduced its net loss by 60%, year-over-year, to $24 million, its total revenue decreased by 10%, to $497 million, and export revenue decreased by 19.3%, to $255 million (51% of total revenue).
MHP’s gross profit in the fourth quarter of 2020 increased by 44%, year-over-year, to $75 million, operating profit amounted to $7 million against an operating loss of $2 million, however EBITDA decreased by 10%, to $63 million.
Chief Executive Officer of the company Yuriy Kosyuk said in the statement that the company managed not only to adapt to the serious challenges of 2020, but also to become more resilient and take advantage of new opportunities. He said that as part of the strategic shift announced a year ago towards more customer-oriented products, including with additional processing and added value, for the domestic market of Ukraine and some export markets, the company launched a number of pilot projects for culinary transformation, including Meat Market convenience stores and DönerMarket houses.
“These offerings are at an early pilot stage and I look forward to updating you on progress in due course as this model is rolled-out more extensively over the next several years, transforming the group’s sales […] to a branded value-added base,” Kosyuk said.
According to the report, revenue for the company’s main chicken production segment in 2020 decreased by 5%, to $1.298 billion, and gross profit due to a decrease in meat prices by 30%, to $191 million, EBITDA by 31%, to $194 million. In the fourth quarter, sales in this segment decreased by 3%, to $328 million, while gross profit and EBITDA due to higher prices for cereals fell 66.7%, to $15 million and $14 million, respectively.
In the crop production segment, MHP’s revenue fell by half in 2020 due to a lower harvest, to $134 million, but due to price increases, gross profit increased 3.2 times to $94 million, and EBITDA by 38%, to $150 million.
In meat processing, sales over 2020 decreased by 3%, to $144 million, while gross profit and EBITDA remained at the same level of $19 million and $20 million, respectively. In the fourth quarter, revenue in this segment decreased by 10%, to $38 million, gross profit by 44%, to $5 million and EBITDA by 38%, to $5 million.
At the same time, the company managed to achieve significant improvement in the performance of Slovenian Perutnina Ptuj and its operations in Croatia and Serbia, which are reported as a European operating segment. Its revenue in 2020 increased by 24%, to $335 million, gross profit by 21%, to $93 million, EBITDA by 25%, to $55 million. In the fourth quarter, sales increased by 12%, to $87 million, gross profit by 5%, to $22 million, and EBITDA remained at $15 million.
In terms of other indicators, the company said that its capital investments in 2020 decreased by 30%, to $79 million, available cash from $341 million to $218 million, and net debt increased from $1.139 billion to $1.244 billion.
In its forecast, MHP said the prospects for the development of poultry farming in 2021 will be very difficult, given the ongoing COVID-19 crisis, weak economic conditions, high feed prices, a very active winter season for bird flu and global oversupply, however the company is confident in its business.
“Transformation to a culinary company: MHP is expanding its focus. The experience of global poultry producers supports MHP’s strategic shift to a culinary company. Moreover, we are transforming our relationship with retail, HoReCa and franchisees in order to reach more customers and meet their evolving needs by providing them with new safe and high quality products. Current challenges have led us to accelerate this strategic shift,” the company said in the report.
The company said that its continued vertical integration provides a significantly lower cost base compared to peers in the industry, as well as improved quality control and better biosecurity of poultry stock, and added that the demand for poultry meat is growing globally along with the decline in demand for red meat.
With regard to possible mergers and acquisitions (M&A), the agricultural holding indicates that it continues to monitor global developments and the potential for mergers and acquisitions. “MHP is well positioned to become an active participant in the ongoing consolidation of the industry,” the company said in the report.
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.

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AGRICULTURAL HOLDING MHP ENDS 2020 WITH NET LOSS OF $133 MLN

Myronivsky Hliboproduct agricultural holding (MHP) received a net loss of $133 million in 2020 versus a net profit of $215 million in 2019, mainly due to exchange rate losses of $204 million due to the annual depreciation of hryvnia by 16%, and the company’s revenue decreased by 7%, to $1.91 billion.
According to the quarterly financial statements of the holding, released on London Stock Exchange on Wednesday, its adjusted EBITDA and operating income decreased by 7%, respectively, to $395 million and $201 million, while the profitability of sales (EBITDA margin) remained at the 2019 level of 21%.
MHP said that in 2020, export revenue decreased by 9.1%, to $1.015 billion, which is 53% of total revenue (56% of total revenue in 2019).
In the fourth quarter of 2020, MHP reduced its net loss by 60%, year-over-year, to $24 million, its total revenue decreased by 10%, to $497 million, and export revenue decreased by 19.3%, to $255 million (51% of total revenue).
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.

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ROBERTO BANFI RETIRING FROM MHP BOARD

Roberto Banfi, after two and half years as a non-executive director and a member of the International Government Relations and Public Affairs Committee, is retiring from the Board of Directors of MHP agricultural holding, effective immediately, the holding said on the London Stock Exchange on Tuesday.

According to the report, Banfi is becoming an Advisor to the Board with a possibility to join both Board and Committees meetings on a regular basis on invite from the Chairman of the Board and Chairmen of Committees.

As reported, in June 2018, the shareholders’ meeting of MHP agricultural holding appointed Banfi as a non-executive director with a planned contract term until 2021.

According to MHP, Banfi in 2014-2016 held the position of Chief Executive Officer (CEO) of the Brazilian company BRF in Europe and Eurasia – one of the world’s largest meat producers.

MHP is the largest producer of chicken in Ukraine.

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UKRAINIAN MHP RAISES POULTRY SALES BY 10% IN Q4 2020

Myronivsky Hliboproduct (MHP) sold 174,260 tonnes of poultry in October-December 2020, which is 10% more than in the same period in 2019.
According to the company’s report on the London Stock Exchange, poultry sales as a whole grew by 4% for the year, to 698,020 tonnes.
MHP clarified that poultry exports in the fourth quarter rose by 8%, to 94,710 tonnes, and in general for the year by 5%, to 373,730 tonnes.
According to the report, the average price of one kg of poultry last year (excluding VAT) decreased by 5% in hryvnias from 2019, to UAH 36.11, and in dollars – by 9%, to $ 1.34. In the fourth quarter, the average price was UAH 38.49, or $ 1.36, which, respectively, is 11% more and 5% less than in the fourth quarter of 2019.
“The 12-month 2020 average chicken meat price was UAH 36.11 ($ 1.34), which is 5% lower in hryvnia terms (9% less in dollars) compared to chicken price in 12 months of 2019, mainly driven by the product mix change in exports (significant decrease in sales of fillet to the EU and increased sales to MENA) and weaker prices on breast fillet in EU as many global competitors experienced reduced demand, which resulted in excess stocks,” the report says.
The company also clarified that Slovenian-based Perutnina and its production in Croatia and Serbia, whose figures will now be given separately as a European operating segment, sold 15,170 tonnes of chicken in the fourth quarter, which is 7% more than in the fourth quarter of 2019. In general, for the year its sales amounted to 63,010 tonnes against 59,800 tonnes in 2019, while prices for European chicken in the fourth quarter decreased by 6%, to EUR2.48 per kg, and for the whole of 2020 by 4%, to EUR2.52 per kg.
“After a temporary decrease in utilization of poultry production capacity in Q1 (by 10% from February to the end of March 2020 as a result of the avian influenza outbreak in Ukraine), since the beginning of Q2 all the company’s poultry production facilities have been operating at full capacity. There were several outbreaks of the avian influenza in Ukraine in December 2020, however, the company continued to export poultry meat to its major markets (except to the EU banned market). None of MHP poultry complex were affected with avian influenza by the time of pre-close trading update release,” according to the document.
“Poultry production volumes in Q4 2020 remained relatively stable, constituting 189,687 tonnes. In 2020 poultry production volumes were relatively stable and constituted 731,279 tonnes,” the company said.

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MHP INTENDS TO LEASE DRAGON CAPITAL’S ARCTICA WAREHOUSE COMPLEX NEAR KYIV

The purpose of the planned lease of the Arctica warehouse complex in the village of Sofiyivska Borschahivka near Kyiv by PJSC Myronivsky Hliboproduct (MHP) from the Dragon Capital group of companies is to store MHP products, the press service of the company has told Interfax-Ukraine.
“MHP does not buy the Arctica warehouse complex owned by Dragon Capital, but leases it. Ukrainian legislation requires permission from the Antimonopoly Committee of Ukraine to be obtained for lease as well,” MHP said, commenting on the consideration of the concentration case started on January 11 by the committee.
MHP is the largest chicken producer in Ukraine.
At the end of 2020, the supervisory board of MHP made a decision to establish MHP Logistics.
The founder and majority shareholder of MHP is Ukrainian businessman Yuriy Kosiuk

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