MHP posted Q1 2020 financial results

MHP agro-industrial holding revenue in Q1 2020 increased by 2% YoY to USD 443 mln (Q1 2019: USD 436 mln).

Pursuant to the company's report, export revenue totalled USD 237 mln, comprising 54% of total revenue (Q1 2019: USD 268 mln, 61% of total revenue).

Operating profit stood at USD 47 mln, 6% lower YoY; while operating margin was 11%.

As reported, adjusted EBITDA margin (net of IFRS 16) increased to 20% from 19%; adjusted EBITDA (net of IFRS 16) increased to USD 90 mln from USD 83 mln.

The company's net loss reached USD 174 mln, compared to profit of USD 33 mln for Q1 2019, primarily due to USD 182 mln of non-cash foreign exchange translation loss in Q1 2020, reflecting a [14]% weakening in the Ukraine Hryvnia/US Dollar exchange rate in the quarter, compared to a gain of USD 21 mln in Q1 2019.

Net profit before foreign exchange differences for Q1 2020 amounted to USD  8 mln, 33% lower than USD 13 mln for Q1 2019.

An outbreak of H5N1 avian influenza in Ukraine (Vinnytsya region) was announced at the end of January 2020. This caused a temporary cessation of exports from Ukraine to the EU, Saudi Arabia and other MENA markets, and the majority of CIS countries. Exports to the EU reopened at the beginning of March 2020 and Saudi Arabia/MENA markets reopened in February and March 2020, while the majority of CIS countries recommenced in May 2020.

"In order to mitigate the adverse impact on MHP's operations and profitability, management decided to decrease capacity utilization of poultry production complexes by approximately 10% from February until the end of March 2020. Since the beginning of April, all of the Company's poultry production facilities have been operating at full capacity again," the report reads.

Previously reported that MHP’s overall production volumes of chicken meat in Q1 2020 increased by 4% and constituted 178.64 thou. t (Q1 2019: 171.27 thou. t).

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