October 20, 2011
Ukraine's MHP announces pre-close trading update
Ukraine's MHP S.A. which focuses on poultry output and grain cultivation, reported its pre-close trading update for the third quarter and nine months ended September 30, 2011.
During the third quarter of 2011, the volume of chicken meat sales to external consumers increased by 23% to 99,900 tonnes compared to the third quarter of 2010. It also increased by 13% to 282,000 tonnes during the first nine months of 2011 because of more effective use of existing capacity as well as decrease in stocks.
Domestic demand for chicken meat during the first nine months of 2011 remained high and the company was able to sell close to 100% of the chicken produced. Export sales for the first nine months of 2011 increased by almost double compared to the same period last year.
The average chicken meat price through the third quarter of 2011 increased by 15% to UAH16.11 (US$2.02) per kilogramme of adjusted weight (excluding VAT) when compared to the third quarter of 2010. This is in line with world poultry price trends and a procrastinated growth due to grain price increase in Ukraine and worldwide during end 2010. Through the nine months of 2011, average chicken prices increased by 7% to UAH14.39 (US$1.80) per kilogramme.
The company's harvest is on track. Taking current crop conditions into account, the company forecasts strong harvest and yields for corn. In general, MHP's yields are significantly higher than Ukraine's average and 2010's output.
Through the first nine months of 2011, the company continued to execute its strategy of growing its local meat processing market share. During the third quarter of 2011, sausage and cooked meat production volumes increased by 10% to 10,900 tonnes compared to 9,900 tonnes during the third quarter of 2010. During the first nine months of 2011, volumes increased by 17% to 28,200 tonnes.
Average sausage and cooked meat prices during the third quarter of 2011 increased by 17% to UAH20.60 (US$2.58) per kilogramme excluding VAT. During the first nine months of 2011, the prices increased by 13% to UAH19.57 (US$2.45) per kilogramme excluding VAT.
MHP is a market leader in meat processing in Ukraine and the management expects the company's market share to increase further. More than 50% of the raw materials required by the company's meat processing operations are internally produced chicken meat.