MHP revenue increased 42 pct in Q1 2019

The agro-industrial holding Myronivsky Hliboproduct (MHP) reported an increased by 42 per cent year-on-year revenue to USD 436 million (Q1 2018: USD 306 million).

Export revenue increased by 65 per cent to USD 268 million, representing 61 per cent of total revenue (Q1 2018: USD 162 million, 53 per cent of total revenue).

By the report information, the adjusted EBITDA decreased to USD 83 million from USD 89 million, as a result of the decrease in margin for all segments; adjusted EBITDA margin declined to 19 per cent (Q1 2018: 29 per cent).

Gross profit remained relatively stable and amounted to USD 81 million; gross profit margin declined to 19 per cent (Q1 2018: 26 per cent).

Net profit was USD 33 million, compared to USD 90 million for Q1 2018; the decrease was mainly due to the impact of a non-cash foreign exchange translation gain and increase in finance costs affected by the application of IFRS 16, as well as higher depreciation charges related to the expansion of Vinnytsia Poultry Complex.

Dr John Rich, Chairman of MHP SE, commented: "MHP has continued to deliver its growth strategy, with on-time and on-budget delivery of the latest phase of expansion in production capacity at Vinnytsia Poultry Complex and completion of an important strategic step with the acquisition of Perutnina Ptuj. PPJ is an excellent company with strong management and a well-established presence in its major markets in the Balkans and southeast Europe. We see good opportunities to work with PPJ team to further develop their business as part of the MHP Group."

According to him, financial results in the first quarter reflect significant growth in revenue as new production facilities have come on stream and include PPJ’s revenue since completion of the acquisition.

"Operating margins for the first quarter were adversely affected by the higher labour costs experienced since the second quarter of last year. Nonetheless, we remain confident in the prospects for the Group, and our expectations for the full year remain unchanged," added Dr John Rich.

NOTE: MHP SE’s financial results for the first quarter 2019 include the results of PPJ from 21 February 2019 when the acquisition was completed. Due to not significant impact on the MHP results for Q1 2019, operating results and trends explanation were presented without PPJ impact.

Previously it was reported that Eurobonds are the main source of funding for MHP.