MHP reports year 2020 financial performance
MHP agro-industrial holding posted a 7% lower YoY revenue of USD 1,911 mln for the year 2020 (12M 2019: USD 2,056 mln) mainly driven by a decrease in the sale of grain.
The company's export revenue stood at USD 1,016 mln, 53% of total revenue (12M 2019: USD 1,186 mln, 58% of total revenue), down 14% YoY. The situation in export markets deteriorated significantly due to several outbreaks of avian influenza (bird flu) at the beginning and at the end of the year 2020 and the adverse effect of the COVID-19 pandemic throughout the year, the report reads.
"2020 proved to be at least as challenging as 2019; yet crises also present opportunities. During the year we have continued to improve the efficiency of our business processes at the same time as the group was following a strategy to transform from a raw material company to a sustainable culinary company, launching a number of pilot projects during 2020," comments Yuriy Kosyuk, Founder and CEO.
He noted the company's strategic shift towards more customer-centric, value-added primary and further processed products for the Ukraine domestic market and some export markets. This strategic shift resulted in a launch of a number of pilot projects for the culinary transformation of the company including “Meat Market” convenience stores and “DönerMarket” houses.
"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 from a commodity production base to a branded value-added base," Yuriy Kosyuk adds.
MHP's operating profit totalled USD 201 mln, down 7% YoY from USD 216 mln, operating margin remained stable at 11%.
The adjusted EBITDA margin (net of IFRS 16) remained the same 18%; adjusted EBITDA (net of IFRS 16) decreased to USD 340 mln (12M 2019: USD 376 mln) driven mainly by a decrease in the Poultry and related operations segment, partly offset by an increase in the Grain the growing segment and European operating segments.
Net loss for the period was USD 133 mln, compared to a profit of USD 215 mln for 12M 2019 primarily due to USD 204 mln of non-cash foreign exchange loss in 12M 2020, reflecting a 16% weakening in the Ukraine Hryvnia/US Dollar exchange rate, compared to a gain of USD 185 mln in 12M 2019. Net profit before foreign exchange differences was USD 71 mln, 137% higher than USD 30 mln for 12M 2019.
"Despite the significant challenges presented during the year, the Group continued to successfully execute upon its strategy and its financial performance was sustainable. Taking into account all challenges of 2020 — several outbreaks of AI, COVID-19 Pandemic, terrible weather conditions in Ukraine — the Group’s adjusted EBITDA decreased by only 10% YoY to USD 340 mln," the Group CEO explains.
In his statement, Yuriy Kosyuk noted the successful integration of Perutnina Ptuj (''PP''), with PP contributing USD 335 mln to Group revenue in 2020. A number of strategic cost optimisation initiatives were implemented and significant modernisation investments were deployed focussing on: increasing capacity, improving working conditions and improving animal welfare and wastewater treatment standards in Slovenia, Bosnia and Herzegovina.
Previously reported that MHP's Katerynopilsky elevator is the largest producer of soybean oil in 2020.