A dip in exports by its home operation has adversely impacted Ukraine-based poultry firm MHP Group within the first quarter of its monetary yr. Not too long ago, army shelling of a warehouse in southern Ukraine resulted in vital losses of its poultry merchandise. In distinction, manufacturing and gross sales have been increased year-on-year for its European poultry operation primarily based within the Balkans area.
For the three months ending March 31, 2024, MHP SE (MHP Group) reported a 4% dip in general income year-on-year at US$719 million. As a share of complete income, exports elevated by one share level to 63%, and a price of US$453 million.
Profitability was typically according to the identical quarter of the earlier yr. Working revenue was reported unchanged at US$84 million, whereas working margin additionally rose one share level to 12%.
At US$119 million, adjusted Earnings Earlier than Curiosity, Taxes, Depreciation, and Amortization (EBITDA) was simply US$3 million increased than within the first quarter of 2023. Adjusted EBITDA margin elevated by one share level year-on-year to 17%. Nevertheless, reported web revenue of US$16 million was down sharply from the US$49 million for the comparable interval.
Early indicators of restoration in Ukraine poultry gross sales
For MHP’s Poultry enterprise in its residence market, general manufacturing for the January-March quarter was described as secure at round 178,500 metric tons (mt). For a similar interval of 2023, output amounted to only over 176,600mt.
Excluding tax, the group achieved a 6% year-on-year improve in common gross sales worth at US$1.99 per kilo.
For the three months, third-party gross sales by the firm’s Ukrainian operation have been down 10% year-on-year at simply round 164,000mt. Nevertheless, this was a 5% improve over the earlier quarter, which MHP attributed to logistical disruptions within the movement of product to European Union (EU) international locations, which lowered the group’s export gross sales. General, poultry meat exports by the Ukraine enterprise have been down 12% year-on-year at 98,055mt.
In April of this yr, EU authorities lastly reached settlement over a new commerce deal between the bloc and Ukraine on agricultural merchandise — regardless of opposition from some EU farming teams. MHP executives mentioned that EU farmers’ anger over the earlier deal had been rooted in misinformation and political involvement.
In the meantime, MHP’s Processed Poultry Meat operations in Ukraine delivered a 19% improve in gross sales for the quarter simply ended at 9,715mt, because of increased poultry meat manufacturing and additional growth of the sector.
General, increased common costs helped to offset the lack of export gross sales for the group in Ukraine, lowering the drop in income to 4% year-on-year.
Together with an elevated valuation of the group’s organic property, MHP reviews that increased costs additionally contributed to enhancements in gross revenue and adjusted EBITDA for the January-March interval in contrast with the identical interval of final yr.
Improved output, gross sales for European Operation
MHP’s European Operation is the previous Perutnina Ptuj poultry firm, primarily based within the Balkans area.
At slightly below 34,000mt, manufacturing quantity by this operation within the first quarter of 2024 was 7% increased than the corresponding interval of final yr. At EUR3.44 (US$3.74) per kilo, the common worth was barely decrease than the EUR3.51 reported for the primary three months of 2023.
Elevated manufacturing of recent and frozen poultry meat (elements, floor meat, and marinated merchandise) was the principle driver for a 16% year-on-year enlargement of poultry meat gross sales to 21,102mt, in keeping with the corporate report.
Comprising primarily sausages and comfort meals, the processed meat enterprise expanded its output by 6% to round 11,400mt within the final quarter. Common worth per kilo was as 2% increased year-on-year at EUR3.37.
For the three-month interval, MHP’s European Operation delivered a 9% improve in income in contrast with the earlier yr at US$136 million, whereas adjusted EBITDA dipped by US$1 million to US$18 million.
Extra on MHP Group
With annual manufacturing of round 697 million chickens, Ukraine-based MHP is the most important poultry firm not solely in its residence market, however in Europe, in keeping with WATTPoultry.com’s High Poultry Firms survey.
For the final full monetary yr (ended December of 2023), MHP reported a 14% improve in income in contrast with the earlier 12 months. At virtually 397,000mt, exports by the Ukrainian operations have been up 8% year-on-year from 2022.
The struggle in Ukraine continues to affect MHP’s operations, in keeping with the corporate.
As its quarterly outcomes have been printed, the firm reported it was working near capability. Nevertheless, a warehouse partly leased by the corporate to retailer frozen hen meat merchandise was destroyed as the results of shelling by occupying forces within the Odesa area in mid-Might. Whereas none of its staff was injured, the agency misplaced poultry merchandise value US8 million.
