November 21, 2013
Ukraine's MHP reports 47% drop in profits
According to the latest financial results of Ukraine's biggest poultry processor, MHP, its January-September 2013 net income fell 47% on-year to US$150 million.
The decline could be explained by a rise in the production cost of chicken, a jump in feed prices and a decrease in the average price of meat and poultry in 2013, the company said.
"The problem is in the feed price increase and the decrease in market prices for poultry, due to a recent supply increase. Today, profitability is falling throughout the poultry sector in Ukraine," said Aleksandr Matyushenko, a member of the Union of Poultry Breeders of Ukraine.
He pointed out that Ovostar Union recently saw profit drop by 30%. "The serious decline seen in the case of MHP can partly be explained by the high depreciation costs," he added.
"Despite the fact that, in 2013, we expect lower financial results than we predicted earlier, the optimised cost of poultry production, combined with the overall growth in chicken production and the recent acquisition of land in Russia and Ukraine will contribute to the further strengthening and improving of the company's financial results in 2014," said MHP chairman Yuri Kosyuk.
MHP financial director Victoria Kapelyushnoy said the company planned to increase poultry meat to 570,000 tonnes in 2014, a 20% rise on levels achieved this year.
She added that MHP would produce around 475,000 tonnes of chicken in 2013, 17.5% more than the year before. "The increase in production will be achieved by increasing the production capacity of the Vinnytsia poultry complex of MHP," she said. She added that the company planned to increase poultry meat production to 570,000 tonnes in 2014, a 20% increase on levels achieved this year.
MHP currently has a share of around 50% of Ukraine's poultry market.