MHP SE Financial Results for the Third Quarter and Nine Months Ended 30 September 2020
MHP SE (LSE:MHPC), the parent company of a leading international agro-industrial group with headquarters in Ukraine, today announces its results for the third quarter and nine months ended 30 September 2020. Hereinafter, MHP SE and its subsidiaries are referred to as «MHP», «The Company» or «The Group».
OPERATIONAL HIGHLIGHTS
Despite the challenges posed by the global COVID-19 pandemic and an outbreak of H5N1 avian influenza in Ukraine in Q1 2020, the Company delivered a satisfactory performance during Q3 and for the 9M 2020.
After a temporary decrease in utilization of poultry production capacity in Q1 (by c.10% from February to the end of March 2020 as a result of the avian influenza outbreak in Ukraine), since the beginning of Q2 all the Company’s poultry production facilities have been operating at full capacity. MHP continued to develop its exports to MENA markets, increasing the share of small whole chicken production (lighter weight, 1.0- 1.5 kg/bird) through greater use of thinning. As a result, although the total number of heads in Q3 increased by 9% year-on-year, the overall tonnage of poultry production decreased by 3%. The switch in production and sales was driven by higher profitability per kilo and a more favorable market environment in MENA compared to other regions.
Q3 2020 highlights
• Poultry production volume decreased by 3% to 181,661 tonnes (Q3 2019: 186,555 tonnes). Poultry production volumes of the European operating segment (Perutnina Ptuj or PP) increased by 14% to 27,615 tonnes (Q3 2019: 24,160 tonnes1)). • The average chicken meat price decreased by 11% year-on-year to US$ 1.36 per kg (Q3 2019: US$ 1.53 per kg) (excluding VAT). The average price of poultry meat produced by PP during Q3 2020 was EUR 2.48 per kg (Q3 2019:EUR 2.63 per kg). • Chicken meat exports totaled 108,472 tonnes, an increase of 37% from 79,189 tonnes in Q3 2019.
9M 2020 highlights
• Poultry production volume was broadly stable at 541,592 tonnes (9M 2019: 540,133 tonnes). Poultry production volume of the European operating segment was up 38% to 77,574 tonnes (9M 2019: 56,037 tonnes1)). • The average chicken meat price decreased by 9% year-on-year to US$ 1.34 per kg (9M 2019: US$ 1.48 per kg) (excluding VAT). The average price of poultry meat produced by PP was EUR 2.52 per kg (9M 2019: EUR 2.64 per kg). • Chicken meat exports increased by 3% to 279,025 tonnes compared with 269,672 tonnes in 9M 2019.
FINANCIAL HIGHLIGHTS
Q3 2020 highlights • Revenue of US$ 547 million, down 2% year-on-year (Q3 2019: US$ 560 million). • Export revenue of US$ 309 million, comprising 56% of total revenue (Q3 2019: US$ 317 million, 57% of total revenue). • Operating profit of US$ 56 million up 40% year-on-year from US$ 40 million, operating margin increased from 7% to 10%. • Adjusted EBITDA (net of IFRS 16) increased from US$ 83 million to US$ 86 million, with adjusted EBITDA margin (net of IFRS 16) up to 16% from 15%.
• Adjusted EBITDA (net of IFRS 16) increased from US$ 83 million to US$ 86 million, with adjusted EBITDA margin (net of IFRS 16) up to 16% from 15%. • Net loss of US$ 47 million, compared to net profit of US$ 104 million for Q3 2019 reflecting a non- cash foreign exchange loss of US$ 61 million, compared with a US$ 109 million gain in Q3 2019. Net profit before foreign exchange differences for Q3 2020 of US$ 82 million, 11% lower than US$ 92 million for Q3 2019.
9M 2020 highlights
• Revenue of US$ 1,414 million, down 6% year-on-year (9M 2019: US$ 1,505 million). • Export revenue of US$ 761 million, comprising 54% of total revenue (9M 2019: US$ 869 million, 58% of total revenue). • Operating profit of US$ 194 million down 11% year-on-year from US$ 218 million, with operating margin stable at 14%. • Adjusted EBITDA (net of IFRS 16) decreased from US$ 331 million to US$ 302 million; with adjusted EBITDA margin (net of IFRS 16) down from 22% to 21%. • Net loss of US$ 109 million, compared to net profit of US$ 276 million in 9M 2019, primarily due to US$ 191 million of non-cash foreign exchange loss in 9M 2020, reflecting a 16% weakening in the Ukraine Hryvnia/US Dollar exchange rate, compared to a gain of US$ 182 million in 9M 2019. Net profit before foreign exchange differences for 9M 2020 of US$ 81 million, 13% lower than US$ 93 million for 9M 2019.
