MHP profited in 1Q 2021

MHP posted a net profit of USD1 mln, compared to a loss of USD 174 mln for Q1 2020.

"Following a difficult first quarter in which sharply increased costs of poultry production, which were adversely affected (as expected) by higher grain and fodder prices, could only partly be recovered by increased poultry prices, we expect visibly improving trends to impact more favourably on our business over the next several months," the company report reads.

In poultry, production costs are expected by MHP to moderate while in the second quarter prices have continued to increase in both domestic and international markets and are anticipated by the company to remain strong for the balance of the year.

It is noted that grain prices, although unusually volatile recently, have been increasing substantially since the second half of 2020 and this strengthening trend is currently expected to continue.

"Growing conditions thus far have been encouraging so that, in the absence of a repeat of the adverse weather conditions seen in summer 2020, crop yields could return at least to historical norms. On balance, while it is too early to predict an improved outlook for the full year and how it will be realized by the end of the year, we are currently optimistic that MHP will at least meet current expectations in 2021," the company says in a statement.

During the three-month period ended 31 March 2021, MHP consolidated revenue remained stable and amounted to USD 447 mln, compared to USD 442.7 mln for the three-month period ended 31 March 2020. Export sales for the three-month period ended 31 March 2021 constituted 49% of total revenue and amounted to USD 216.5 mln, compared to USD 237.4 mln, 53% of total revenue for the three-month period ended 31 March 2020.

Operating profit decreased by 66% to USD 15.9 mln for the three-month period ended 31 March 2021 compared to USD 47 mln for the three-month period ended 31 March 2020, mainly as a result of a decrease in gross profit.

Adjusted EBITDA (net of IFRS 16) decreased to USD 57 mln from USD 90 mln; adjusted EBITDA margin (net of IFRS 16) decreased to 13% from 20%.

In late April, the company reported about its first shipment of Ukrainian chicken meat to the UK.