MHP S.A. MHPC Q3 and 9M 2012 Financial Results

  MHP S.A. (MHPC) - Q3 and 9M 2012 Financial Results

RNS Number : 1897R
MHP S.A.
15 November 2012








PRESS RELEASE

November 15, 2012, Kyiv, Ukraine

                                   MHP S.A.

      UnauditedFinancial Results for the Third Quarter and Nine Months

                           ended 30 September 2012

MHP S.A. ("MHP"  or the  "Company", LSE ticker:  "MHPC"), one  of the  leading 
agro-industrial companies in  Ukraine, focusing on  the production of  poultry 
and the cultivation of  grain, today announces its  unaudited results for  the 
third quarter and the nine months ended 30 September 2012.

Key operational highlights

Poultry and related operations

o During the first nine months of 2012 ("9M 2012") all the Company's  chicken 
production facilities continued to operate at full capacity.

o Consumer demand remained  high and the  Company was able  to sell close  to 
100% of the chicken meat produced.

o The Company's share of industrially produced chicken in Ukraine in 9M  2012 
was around 50%.

o During 9M 2012 MHP increased its overall production volumes by 4,000 tonnes
to 295,000 tonnes mostly driven by an increase in production in Q3 2012 due to
the trial production start at the Vinnytsia complex.

o The average chicken meat price in Q3 2012 increased by 9% to UAH 17.57  per 
kg of adjusted  weight (excluding VAT)  when compared to  Q3 2011. Through  9M 
2012 average chicken prices increased by 20% to UAH 17.29 per kg (9M 2011: UAH
14.39 per kg).

o In 9M 2012 MHP sold 147,100 tonnes of sunflower oil at an average price US$
1,100 per tonne, which  decreased by 15%  from US$ 1,297 in  9M 2011, in  line 
with international commodity market trends.

o Export sales  of chicken meat  during 9M  2012 increased by  more than  20% 
compared to the same period  last year, to almost  11% of MHP's total  chicken 
sales.

Grain growing

o During 9M 2012 the Company's land bank remained stable at 280,000  hectares 
of land.

o The Company's 2012 harvest campaign is almost complete. MHP's crops  yields 
are significantly higher than Ukraine's average.

o Current  MHP's corn  yield is  about 8.0  tonnes per  1 hectare.  The  corn 
harvest is on track and over 85% complete.

Other agriculture

o Due  to  the  product  portfolio  optimization,  sausage  and  cooked  meat 
production volumes decreased  by 6% to  26,610 tonnes in  9M 2012 compared  to 
28,200 tonnes in 9M 2011.

o The Company's market  share of Ukraine's sausage  and cooked meat  products 
remained stable at around 10%.

Vinnytsia - new green field expansion project



o Construction of Phase 1 (US$  750 million) of Vinnytsia project is  running 
to schedule and on budget.

o The  sunflower crushing  plant and  fodder plant  have been  launched  into 
operations.

o The poultry complex is working in a testing mode as planned.

o Production of Phase 1  is expected to be  launched in industrial regime  at 
the beginning of 2013 and to reach its full annual capacity of 220,000  tonnes 
of poultry in 2015.

Key financial highlights

Q3 2012 highlights

o Revenue increased by 10% to US$ 389 million (Q3 2011: US$ 352 million).

o EBITDA increased by 4% to US$ 149 million (Q3 2011: US$ 143 million).

o EBITDA margin remained high and constituted 38%.

o Net income decreased by  3% to US$ 111 million  (Q3 2011: US$ 115  million) 
due to non-cash foreign exchange differences.

9M 2012 highlights

o Revenue increased by 19% to US$ 1,044 million (9M 2011: US$ 880 million).

o EBITDA increased by 26% to US$ 379 million (9M 2011: US$ 301 million)

o EBITDA margin increased to 36% from 34% in 9M 2011.

o Net income increased by 40% to US$ 281 million (9M 2011: US$ 201 million).

Commenting on the results, Yuriy Kosyuk, Chief Executive Officer, said:

"Strong and  sustainable revenue  and  EBITDA growth  and maintenance  of  our 
sector-leading margins reflect  the strength of  our uniquely  self-sufficient 
business model and put us in a strong position to continue delivering  against 
our targets for 2012.

During the  period poultry  prices  in Ukraine  continued  to show  a  growing 
dynamic and we continued to focus on what we do best - producing and marketing
a range of popular, dependable, high quality and affordable poultry products.

Preliminary results in our grain growing  segment are favorable mostly due  to 
successful crop  management and  strong grain  prices worldwide.  Harvest  of 
early crops, such as rapeseeds and wheat as well as sunflower, proceeded  well 
and resulted in good  and even higher  yields than in  2011. MHP's yields,  as 
usual, are much higher than Ukraine's average. Meanwhile, initial observations
indicate that our corn harvests will also produce good yields.

We remain  as  confident  as  we  have  ever  been  that  MHP  will  carry  on 
implementation of  its  strategy and  keep  on delivering  positive  financial 
results and achieving growth in shareholder value."

                                   - end -

MHP's management  will  host a  conference  call for  investors  and  analysts 
followed by a Q&A session. The dial-in details are:



Date:  Thursday, 15 November 2012



Time:   09.00 New York / 14.00 London /
16.00 Kyiv / 18.00 Moscow

Title:   MHP - Q3 and 9M 2012 Financial
Results

International/UK Dial in: +44 (0) 1452 560 304

USA free call: +1 631 621 5256

Russia free call 8108 002 394 2044

Conference ID  64451043



A live webcast of the presentation will be available at:

https://webconnect.webex.com/webconnect/onstage/g.php?t=a&d=665995350



Alternative URL:

https://webconnect.webex.com/

Click on "Unlisted Events"





                                 

For investor relations enquiries  Kyiv: +38044207 99 58

Anastasia Sobotiuk (Kyiv) a.sobotyuk@mhp.com.ua









Financial overview

                                                                             %

                             Q3 2012 Q3 2011 % change* 9M 2012 9M 2011 change*
Revenue               US$, m     389     352       10%   1,044     880     19%
IAS 41 standard gains US$, m      37      42      -12%      50      61    -17%
Gross profit          US$, m     148     139        7%     371     295     26%
Gross margin               %     38%     39%    (1pps)     36%     34%    2pps
Operating profit      US$, m     130     126        3%     326     254     28%
Operating margin           %     33%     36%    (3pps)     31%     29%    2pps
EBITDA                US$, m     149     143        4%     379     301     26%
EBITDA margin              %     38%     41%    (3pps)     36%     34%    2pps
Net income            US$, m     111     115       -3%     281     201     40%
Net income margin          %     28%     33%    (5pps)     27%     23%    4pps

* pps - percentage points

Q3 2012 Consolidated Financial Results

Consolidated revenue totaled US$ 389 million, 10% greater than US$ 352 million
in Q3 2011 due to  the growth of chicken meat  price and higher sunflower  oil 
and grain sales volumes. Export sales  constituted 36% of total revenue in  Q3 
2012.

Q3 2012 EBITDA increased by 4% to  US$ 149 million (Q3 2011: US$ 143  million) 
and remained at high level constituting 38% in Q3 2012.

Net income from operations decreased  by 3% to US$  111 million (Q3 2011:  US$ 
115 million) due to non-cash  foreign exchange losses of  US$ 4 million in  Q3 
2012 related to Euro/USD exchange rate (in Q3 2011 there were non-cash foreign
exchange gains of US$ 6 million). Net income margin decreased from 33% to 28%.

9M 2012 Consolidated Financial Results

The dynamics of consolidated financial results of 9M 2012 are strong.  Revenue 
reached US$ 1,044  million in  9M 2012,  which is  19% greater  than US$  880 
million in 9M 2011. The main reasons  for the high growth in revenue were  the 
increase in chicken price as well as an increase in the volume of grain  sold. 
Export sales amounted to 33% of total revenue of MHP.

EBITDA was US$ 379 million, 26% higher year-to-year (9M 2011: US$ 301 million)
as a consequence of vigorous financial result in poultry segment. Consolidated
EBITDA margin increased from  34% in 9M  2011 to 36% in  9M 2012 reflecting  a 
substantial increase in chicken prices.

Net income totaled US$ 281 million, which  is 40% higher than in 9M 2011.  Net 
margin increased from 23% in 9M 2011 to 27% in 9M 2012.

Poultry and related operations

                             Q3 2012 Q3 2011 % change 9М 2012 9М 2011 % change
Revenue               US$, m     278     273       2%     801     719      11%
- Poultry and other   US$, m     221     221        -     639     557      15%
- Sunflower oil       US$, m      57      52       9%     162     162        -
IAS 41 standard gains US$, m       -     (4)        -       4       1     187%
Gross profit          US$, m      89      73      21%     267     185      45%
Gross margin               %     32%     27%     5pps     33%     26%     7pps
EBITDA                US$, m      94      82      15%     287     203      42%
EBITDA margin              %     34%     30%     4pps     36%     28%     8pps
EBITDA per 1 kg          US$    1.00    0.86      17%    1.04    0.72      45%

* pps - percentage points

Q3 2012 Poultry and related operations segment financial results

                                                             9М      9М      %

Poultry                        Q3 2012 Q3 2011 % change    2012    2011 change
Sales volume, third parties
tonnes                          93,200  99,900      -7% 274,800 282,000    -3%
Price per 1 kg net VAT, UAH      17.57   16.11       9%   17.29   14.39    20%


Sunflower oil
Sales volume, third parties
tonnes                          52,350  40,900      28% 147,100 125,400    17%
Price per 1 tonne net VAT, US$   1,084   1,284     -16%   1,100   1,297   -15%



In Q3 2012 the production  volume of chicken meat  increased by 7% to  104,800 
tonnes due to  the trial production  start at the  Vinnytsia complex.  Chicken 
meat sales volumes to third parties decreased by 7% to 93,200 tonnes  compared 
to Q3 2011 as a result of sales  of almost 10,000 tonnes of chicken meat  from 
stocks in Q3 2011.

The average chicken meat price in Q3 2012 increased by 9% to UAH 17.57 per  kg 
of adjusted weight (excluding VAT) compared to UAH 16.11 per kg in Q3 2011

In Q3 2012, there were  52,350tonnes of sunflower oil  sold for export at  an 
average price of US$ 1,084  per tonne. Decline in  sunflower oil price by  16% 
was compensated by 28% growth of sunflower sales volume, that was resulted  in 
9% rise of sunflower oil revenue in Q3 2012 compared to Q3 2011.

The segment's revenue increased  slightly by 2% to  US$ 278 million (Q3  2011: 
US$ 273 million)  as a consequence  of higher chicken  meat prices and  higher 
sunflower oil sales volume.

Segment's gross profit increased  by 21% to  US$ 89 million  (Q3 2011: US$  73 
million), with gross profit margin increasing from 27% in Q3 2011 to 32% in Q3
2012.

EBITDA of the poultry segment reached US$ 94 million in Q3 2012, which is  15% 
greater than in Q3 2011 and in  line with an increase in gross profit.  EBITDA 
margin increased from 30% in Q3 2011 to 34% in Q3 2012.

9M 2012 Poultry and related operations segment financial results

During 9M 2012 chicken meat sales volumes to third parties slightly  decreased 
by 3% to 274,800 tonnes compared to 282,000 tonnes in 9M 2011 due to sales  of 
almost 10,000 tonnes of chicken meat  from stocks in Q3 2011. Average  chicken 
meat price increased by 20% to UAH 17.29 per kg (9M 2011: UAH 14.39 per kg).

Average sunflower oil price decreased  by 15% to US$  1,100 per tonne in  line 
with world trends, while  sunflower oil sales  volume grew by  17% in Q3  2012 
compared to Q3 2011.

In 9M 2012 the poultry segment's revenue totaled US$ 801 million, which is 11%
greater than US$ 719 million in 9M 2011.

Poultry production costs in 9M 2011 were slightly higher compared to 9M  2011, 
mainly  due  to  higher  utilities  prices.  Gross  profit  increased  by  45% 
year-on-year to US$ 267 million. Gross profit margin rose from 26% in 9M  2011 
to 33% in 9M 2012 as a result of the chicken price increase.

Poultry export sales in 9M 2012 increased by around 20% year-on-year to US$ 66
million, which constituted about 11% of revenue from chicken meat sales.

During nine months  of 2012 EBITDA  increased by  42% to US$  287 million  (9M 
2011: US$  203  million) in  line  with  gross profit  growth.  EBITDA  margin 
amounted to 36% in 9M 2012 compared to 28% in 9M 2011.

Grain growing operations

                            Q3 2012 Q3 2011 % change 9M 2012 9M 2011 % change
Revenue               US$, m      69      38      82%     126      54     135%
IAS 41 standard gains US$, m      36      44     -18%      47      59     -21%
Gross profit          US$, m      57      62      -9%      96     101      -5%
EBITDA                US$, m      63      65      -4%     105     104       1%



In 2012 the Company harvests around 250,000 hectares of land in grain  growing 
operations and cultivates around 30,000 hectares of land in other agricultural
operations. Total  land  bank in  2012  remains relatively  stable  at  around 
280,000 hectares.

                         2012                               2011
             Production,         Cropped        Production,        Cropped
               tonnes           hectares*          tonnes         hectares*
Corn             865,515***       101,870***         1,022,783         107,750
Wheat               208,770           39,000           267,250          52,210
Sunflower            90,820           30,570            73,735          27,000
Rapeseed             42,570           12,385            25,400           9,150
Other**          In process       In process           322,900          54,090
Total:                  n/a              n/a         1,712,068         250,200



* Actual hectares under crop  and excluding land left  fallow as part of  crop 
rotation

** Includes soybean, barley and sugar beet

*** Based on 85% completed corn harvest

As a result of MHP's operational  efficiency and employment of best  practice, 
MHP's grain  yields  in  2012 remained  strong,  despite  unfavorable  weather 
conditions in Ukraine's 2011/2012 campaign.

                         2012                               2011
                               Ukraine's                         Ukraine's
           MHP's average*      average**      MHP's average*     average**
Corn                  8.0                4.5             9.5               6.4
Wheat                 5.4                2.9             5.1               3.4
Sunflower             3.0                1.7             2.7               1.8
Rapeseed              3.4                2.3             2.8               1.7
Soya beans            1.8                1.7             1.6               1.4



* Tonnes per hectare

** MHP - net weight, Ukraine - bunker weight



In 2012  the Company's  yields  of early  crops  are almost  double  Ukraine's 
average and even higher than MHP's yields last year. Corn and sunflower yields
are in line  with MHP's  forecast for this  year taking  into account  weather 
conditions.

The Company's corn harvest is  ongoing and as of  today is over 85%  complete. 
The current net  yield is  averaging about 8.0  tonnes per  hectare, which  is 
slightly less than MHP's corn yield  of 9.5 in 2011, but significantly  higher 
than Ukraine's  average  of  4.5  tonnes per  hectare  (Source:  Committee  of 
Statistics).

In 9M 2012 the grain growing segment revenue totaled US$ 126 million, which is
135% greater than in 9M 2011as a result of higher grain volumes.

As usual, a significant part of the Q3 2012 financial results in grain segment
is generated by IAS 41 gains from revaluation of grains in stocks and corn  in 
fields. In 9M 2012 EBITDA of grain growing operations segment remained  almost 
the same as in 9M 2012 (US$ 105 million in 9M 2012 vs US$ 104 in 9M 2011).

Other agricultural operations

                                Q3    Q3             9М    9М

                            2012 2011 % change 2012 2011 % change
Revenue               US$, m    43    41       3%   116   107       9%
- Meat processing     US$, m    29    30      -3%    77    74       4%
- Other              US$, m    14    11      20%    39    33      20%
IAS 41 standard gains US$, m     2     3     -44%    -1     1    -200%
Gross profit          US$, m     3     4     -26%     8    10     -22%
Gross margin               %    7%    9%   (2pps)    7%    9%   (2pps)
EBITDA                US$, m     2     3     -47%     9    11     -19%
EBITDA margin              %    4%    8%   (4pps)    7%   10%   (3pps)
* pps - percentage points



                                     Q3     Q3              9М     9М       %

Meat processing products           2012  2011 % change  2012  2011 change
Sales volume, third parties
tonnes                            10,100 10,900      -7% 26,610 28,200     -6%
Price per 1 kg net VAT, UAH        22.34  20.60       8%  22.02  19.57     13%

Due to our continued strategy of product mix optimization, production  volumes 
of sausages and cooked meats decreased by 7% year-ton-year to 10,100 tonnes in
Q3 2012 and by 6%  to 26,610 tonnes in 9M  2012. Nevertheless, MHP's share  of 
the Ukrainian meat processing market is about 10% as usual.

During 9M 2012 average sausage and  cooked meat prices were gradually  rising. 
Prices increased by 8% to UAH 22.34 per kg excluding VAT in Q3 2012 vs Q3 2011
and by 13% to UAH 22.02 per kg excluding VAT in 9M 2012 vs 9M 2011.

In Q3 2012 the segment's revenue rose slightly by 3% year-to-year. In 9M  2012 
revenue totaled US$ 116 million,  which is 9% greater  than in 9M 2011  mainly 
due to growth of price of meat processing.

The segment's gross profit amounted to US$ 3 million in Q3 2012, 26% less than
in Q3 2011, and US$ 8 million in 9M 2012, 22% less than in 9M 2011. EBITDA  of 
other agricultural operations segment decreased by 47% to US$ 2 million in  Q3 
2012 year-to-year and by 19% to US$ 9 million in 9M 2012 year-to-year.  EBITDA 
margin declined to 4% in  Q3 2012 compared to  8% in Q3 2011  and to 7% in  9M 
2012 compared to 10% in 9M 2011.



Current Group financial position, cash flow and liquidity

                                                       9М 
Cash Flows US$, m                  Q3 2012 Q3 2011    2012 9М 2011
Cash from operations                   109     106     296     209
Change in working capital             (37)    (11)    (97)    (39)
Net Cash from operating activities      72      95     199     170
Cash from investing activities        (59)    (76)   (196)   (182)
Non-cash investments                  (19)    (22)    (99)    (54)
CAPEX                                 (78)    (98)   (295)   (236)
Cash from financing activities         (8)      34    (20)    (25)
Non-cash financing                      19      22      99      54
Deposits                                 -       7       2     126
Total financial activities              11      63      81     155
Total change in cash                     5      60    (15)      89



In 9M 2012  the increase of  working capital  totaled US$ 97  million and  was 
mainly related to:

- Increase in biological assets US$ 93 million, mostly related to corn  in 
fields and  also  including  about  US$  15 million  due  to  start  of  trial 
production of Vinnytsia facilities;

- Increase in VAT recoverable related to the intensive CAPEX program,  US$ 
42 million;

- Decrease in agricultural produce US$  50 mostly due to export sales  and 
internal consumption of corn harvested in 2011.

Total CAPEX was US$ 78 million in Q3 2012 and US$ 295 million in 9M 2012, with
most of this  related to the  capital intensive Vinnytsia  project. Since  the 
start of construction  in May  2010, approximately  US$ 570  million has  been 
invested into this project.

During the 9M  2012 period, the  Group repurchased, under  the share  buy-back 
program, an  additional 3,445,000  of its  outstanding ordinary  shares for  a 
total cash consideration of US$ 41.5 million.

Vinnytsia - new green field project

Construction works at  the Vinnystia complex  are to schedule  and on  budget. 
Significant progress  has already  been  made with  the poultry  farm,  fodder 
complex and infrastructure at the Vinnytsia site.

Poultry Farm

· Hatchery is complete and launched in operations;

· 3 brigades (chicken rearing zones) with 38 chicken houses in each are
complete and launched in testing operations, 9 brigades are under
construction;

· Construction of the slaughter house for Phase 1 (220,000 tonnes of
poultry per annum) is complete and launched in testing operations.

Fodder Plant and Grain Storage Facilities

· Fodder Plant and Sunflower Crushing Plant are in testing operations now.

Infrastructure and Social Responsibility

· Construction of external water supply (60 km) is complete;

· Construction of 45 km of new roads is complete;

· Construction of 200 new residential apartments is complete.

Debt Structure

Debt                   30.09.2012 30.06.2012 31.12.2011
Total Debt US$, m            1,026        990        898
Cash and bank deposits       (82)       (75)       (97)
Net Debt                       944        915        801
LTM EBITDA                     479        474        401
Net Debt /LTM EBITDA          1.97       1.93      2.00

As of September 30, 2012, the Company's total debt was US$ 1,026 million, most
of which was denominated in US dollars. The average weighted cost of debt  was 
below 9%. Almost 60% of the Company's total debt is the Eurobond that  matures 
in April 2015.

At the end  of 9M 2012,  MHP had US$  82 million in  cash and short-term  bank 
deposits. Net debt increased to US$ 944 million as of September 30, 2012.  Net 
Debt/EBITDA ratio at the end of the period was 1.97 versus 2.00 at the end  of 
2011 (Eurobond covenant: 2.5).

As a hedge  for currency  risks, revenues from  the export  of sunflower  oil, 
sunflower husks and chicken meat are denominated in US Dollars, fully covering
debt service expenses.  During 9M 2012  the Company received  US$ 342  million 
from export sales of  sunflower oil, chicken meat  and grains compared to  US$ 
244 in the same period of 2011.

Outlook

The Company  continues to  operate  at full  capacity  and strong  demand  for 
poultry meat  guarantees  the  total  sales  of  the  Company's  chicken  meat 
production.

Following the  Company's strategy  and objectives,  MHP continues  to  develop 
export markets in  order to  establish reliable  and long-term  relationships. 
During the reporting period MHP  expanded its operations in different  regions 
and will continue its export expansion strategy further.

As the Company approaches the year end, its strong results for the first  nine 
months provide a solid foundation for robust financial and operational results
for the full year.

We are confident that we  will be able to  continue to implement our  strategy 
and keep on delivering  strong results as one  of the leading  agro-industrial 
companies in Ukraine and the region.





                                   - End -



Notes to Editors:



About MHP



MHP is the leading producer of  poultry products in Ukraine with the  greatest 
market share and  highest brand recognition  for its products.  MHP owns  and 
operates each of  the key stages  of chicken production  processes, from  feed 
grains and  fodder production  to egg  hatching and  grow out  to  processing, 
marketing, distribution and sales (including through MHP's franchise outlets).
Vertical integration reduces MHP's dependence on suppliers and its exposure to
increases in raw  material prices.  In addition to  cost efficiency,  vertical 
integration also allows MHP to maintain strict biosecurity and to control  the 
quality of  its  inputs and  the  resulting  quality and  consistency  of  its 
products through to the point of sale.  To support its sales, MHP maintains  a 
distribution network  consisting of  11 distribution  and logistical  centres, 
within major Ukrainian cities. MHP uses its trucks for the distribution of its
products, which Management believes  reduces overall transportation costs  and 
delivery times. MHP also has a leading grain cultivation business growing corn
to support the vertical integration of its chicken production and increasingly
other grains, such as wheat  and rape, for sale  to third parties. MHP  leases 
agricultural land located primarily in  the highly fertile black soil  regions 
of Ukraine.



Since May 15, 2008, MHP has traded on the London Stock Exchange under the
ticker symbol MHPC.



Forward-Looking Statements



This press  release might  contain forward-looking  statements that  refer  to 
future events or forecast financial indicators for MHP S.A. Such statements do
not guarantee that these are  actions to be taken by  MHP S.A. in the  future, 
and estimates can  be inaccurate  and uncertain. Actual  final indicators  and 
results can considerably  differ from  those declared  in any  forward-looking 
statements. MHP S.A.  does not intend  to change these  statements to  reflect 
actual results.



 MHP S.A.
AND ITS SUBSIDIARIES

Interim condensed consolidated Financial Statements



 For the
nine-month period ended 30 September 2012



CONTENT



MANAGEMENT
STATEMENT................................................................................................................
(a)

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE-MONTH  PERIOD 
ENDED 30 SEPTEMBER 2012

INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME............................. 3

INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL
POSITION...................................... 4

INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY...................................... 5

INTERIM CONDENSED CONSOLIDATED CASH FLOW
STATEMENT......................................................... 7

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS................................. 8

1.Corporate
information........................................................................................................................
8

2.Basis of preparation and accounting
policies.......................................................................................
9

3.Segment
information.......................................................................................................................
10

4.Profit for the
period..........................................................................................................................
10

5.Property, plant and
equipment..........................................................................................................
11

6.Long-term VAT recoverable,
net........................................................................................................
11

7.Biological
assets............................................................................................................................
11

8.Inventories and agricultural
produce..................................................................................................
11

9.Treasury
shares..............................................................................................................................
11

10. Bank
borrowings...........................................................................................................................
12

11. Bonds
issued...............................................................................................................................
13

12. Trade accounts
payable................................................................................................................
13

13. Related party balances and
transactions........................................................................................
13

14. Contingencies and contractual
commitments..................................................................................
14

15. Currency
risk...............................................................................................................................
15

16. Authorization of the interim condensed consolidated financial
statements.......................................... 16



MANAGEMENT STATEMENT

                                      

To the best  of our  knowledge, the unaudited  condensed consolidated  interim 
financial statements  prepared  in  accordance  with  the  applicable  set  of 
accounting standards give  a true and  fair view of  the assets,  liabilities, 
financial position and profit of the Company and the undertakings included  in 
the consolidation  taken  as a  whole,  together  with a  description  of  the 
principal risks and uncertainties that they face.



14 November 2012



On behalf of the Board:

Chief Executive
Officer
Yuriy Kosyuk

Chief Financial
Officer
 Viktoria Kapelyushnaya

INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the nine-month period ended 30 September 2012

(in thousands of US dollars, unless otherwise indicated)





                                                    Notes      2012       2011
Revenue                                               3   1,043,697    879,662
Net change in fair value of biological assets and
agricultural produce                                  3      50,049     60,534
Cost of sales                                             (722,749)  (644,749)
Gross profit                                                370,997    295,447
Selling, general and administrative expenses               (88,449)   (75,311)
VAT refunds and other government grants income               69,071     47,011
Other operating expenses, net                              (25,766)   (12,826)
Operating profit                                            325,853    254,321
Finance income                                                2,586      5,391
Finance costs                                              (43,111)   (51,725)
Foreign exchange gain/(loss), net                    15         736    (2,530)
Other expenses, net                                            (68)      (452)
Other expenses, net                                        (39,857)   (49,316)
Profit before tax                                           285,996    205,005
Income tax expense                                          (5,227)    (4,171)
Profit for the period                                 4     280,769    200,834
Other comprehensive loss
Cumulative translation difference                             (435)    (1,024)
Other comprehensive loss for the period                       (435)    (1,024)
Total comprehensive income for the period                   280,334    199,810
Profit attributable to:
Equity holders of the Parent                                265,926    186,245
Non-controlling interests                                    14,843     14,589
                                                            280,769    200,834
Total comprehensive income attributable to:
Equity holders of the Parent                                265,491    185,221
Non-controlling interests                                    14,843     14,589
                                                            280,334    199,810
Earnings per share
Basic and diluted earnings per share (USDper                             1.73
share)                                                         2.49



                                      



On behalf of the Board:

Chief Executive
Officer
Yuriy Kosyuk

Chief Financial
Officer
 Viktoria Kapelyushnaya

  The accompanying notes on the pages 8 to 16 form an integral part of these
             interim condensed consolidated financial statements

INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

as of 30 September 2012

(in thousands of US dollars, unless otherwise indicated)



                                                30 September  31 December 2011

                                          Notes         2012
ASSETS
Non-current assets
Property, plant and equipment               5      1,260,205         1,008,923
Land lease rights                                     26,572            27,227
Deferred tax assets                                    7,512             7,795
Long-term VAT recoverable, net              6         33,503            24,850
Non-current biological assets                         47,443            46,327
Long-term bank deposits                                6,010             6,017
Other non-current assets                              15,478            14,476
                                                   1,396,723         1,135,615
Current assets
Inventories                                 8        190,526           182,240
Biological assets                           7        285,674           135,990
Agricultural produce                        8        122,237           169,022
Other current assets, net                             34,818            21,989
Taxes recoverable and prepaid, net                   156,472           137,175
Trade accounts receivable, net                        71,808            65,794
Short-term bank deposits                                   -             1,777
Cash and cash equivalents                             81,616            94,758
                                                     943,151           808,745
TOTAL ASSETS                                       2,339,874         1,944,360
EQUITY AND LIABILITIES
Equity
Share capital                                        284,505           284,505
Treasury shares                             9       (82,020)          (40,555)
Additional paid-in capital                           179,565           179,565
Revaluation reserve                                   18,781            18,781
Retained earnings                                    945,741           679,815
Translation reserve                                (241,226)         (240,791)
Equity attributable to equity holders of
theParent                                         1,105,346           881,320
Non-controlling interests                             59,332            44,489
Total equity                                       1,164,678           925,809
Non-current liabilities
Bank borrowings                            10        176,893           109,108
Bonds issued                               11        570,354           567,000
Finance lease obligations                             43,419            32,558
Deferred tax liabilities                               1,968             2,207
                                                     792,634           710,873
Current liabilities
Trade accounts payable                     12         72,754            52,689
Other current liabilities                             46,919            53,269
Bank borrowings                            10        214,317           170,380
Accrued interest                                      27,505            12,073
Finance lease obligations                             21,067            19,267
                                                     382,562           307,678
TOTAL LIABILITIES                                  1,175,196         1,018,551
TOTAL EQUITY AND LIABILITIES                       2,339,874         1,944,360





On behalf of the Board:

Chief Executive
Officer
Yuriy Kosyuk

Chief Financial
Officer
 Viktoria Kapelyushnaya

                                      

  The accompanying notes on the pages 8 to 16 form an integral part of these
             interim condensed consolidated financial statements

INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the nine-month period ended 30 September 2012

(in thousands of US dollars, unless otherwise indicated)





                        Attributable to equity holders of the Parent
                Share            Additional
                       Treasury     paid-in  Revaluation  Retained  Translation             Non-controlling      Total
              capital    shares     capital      reserve  earnings      reserve      Total        interests     equity
Balance as of
1 January
2012          284,505  (40,555)     179,565       18,781   679,815    (240,791)    881,320           44,489    925,809
Profit for
the period          -         -           -            -   265,926            -    265,926           14,843    280,769
Other
comprehensive
income              -         -           -            -         -        (435)      (435)                -      (435)
Total
comprehensive
income for
the period          -         -           -            -   265,926        (435)    265,491           14,843    280,334
Acquisition
of treasury
shares (Note
9)                  -  (41,465)          -            -        -            -   (41,465)                -   (41,465)
Balance as of
30 September
2012          284,505  (82,020)     179,565       18,781   945,741    (241,226)  1,105,346           59,332  1,164,678







































On behalf of the Board: 

Chief Executive
Officer
Yuriy Kosyuk

Chief Financial
Officer
 Viktoria Kapelyushnaya

                                      

                                      

                                      

                                      

                                      

                                      

  The accompanying notes on the pages 8 to 16 form an integral part of these
             interim condensed consolidated financial statements

INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the nine-month period ended 30 September 2011

(in thousands of US dollars, unless otherwise indicated)





                          Attributable to equity holders of the Parent
                  Share            Additional
                         Treasury     paid-in  Revaluation  Retained  Translation           Non-controlling    Total
                capital    shares     capital      reserve  earnings      reserve    Total        interests   equity
Balance as of 1
January 2011    284,505  (40,555)     179,565       18,781   436,439    (237,751)  640,984           29,384  670,368
Profit for the
period                -         -           -            -   186,245            -  186,245           14,589  200,834
Other
comprehensive
income                -         -           -            -         -      (1,024)  (1,024)                -  (1,024)
Total
comprehensive
income for the
period                -         -           -            -   186,245      (1,024)  185,221           14,589  199,810
Dividends paid
by subsidiary
to
non-controlling
shareholders          -         -           -            -         -            -        -            (602)    (602)
Balance as of
30 September
2011            284,505  (40,555)     179,565       18,781   622,684    (238,775)  826,205           43,371  869,576

















On behalf of the Board:

Chief Executive
Officer
Yuriy Kosyuk

Chief Financial
Officer
 Viktoria Kapelyushnaya

                                      

                                      

                                      

                                      

                                      

                                      

  The accompanying notes on the pages 8 to 16 form an integral part of these
             interim condensed consolidated financial statements

INTERIM CONDENSED CONSOLIDATED CASH FLOW STATEMENT

for the nine-month period ended 30 September 2012

(in thousands of US dollars, unless otherwise
indicated)



                                                               2012       2011
Operating activities
Profit before tax                                           285,996    205,005
Non-cash adjustments to reconcile profit before tax to
net cash flows
Depreciation and amortization expense                        53,393     46,510
Net change in fair value of biological assets and
agricultural produce                                       (50,049)   (60,534)
Change in allowance for irrecoverable amounts and direct
write-offs                                                   18,801     10,424
Loss  on disposal of property, plant and equipment and
other non-current assets                                        168          -
Finance income                                              (2,586)    (5,391)
Finance costs                                                43,111     51,725
Unrealised foreign exchange (gain)/loss, net                  (736)      2,530
Operating cash flows before movements in working capital    348,098    250,269
Working capital adjustments
Change in inventories                                        10,570      1,783
Change in biological assets                                (93,392)   (73,901)
Change in agricultural produce                               50,831     11,682
Change in other current assets                             (12,841)      2,856
Change in taxes recoverable and prepaid                    (42,213)    (5,755)
Change in trade accounts receivable                         (6,555)    (6,171)
Change in other liabilities                                 (4,419)      5,755
Change in trade accounts payable                              1,346     24,855
Cash generated by operations                                251,425    211,373
Interest received                                             2,586      5,631
Interest paid                                              (46,535)   (43,944)
Income taxes paid                                           (8,877)    (3,003)
Net cash flows from operating activities                    198,599    170,057
Investing activities
Purchases of property, plant and equipment                (191,593)  (172,812)
Purchases of other non-current assets                       (2,302)    (2,348)
Purchase of land lease rights                                 (845)    (3,559)
Proceeds from disposals of property, plant and equipment        940          -
Purchases of non-current biological assets                  (1,761)    (2,213)
Investments in short-term deposits                              (4)   (23,529)
Withdrawals of short-term deposits                            1,792    149,602
Loans provided to employees                                       -      (717)
Net cash flows used in investing activities               (193,773)   (55,576)
Financing activities
Proceeds from bank borrowings                               128,155     91,080
Repayment of bank borrowings                               (90,373)   (98,881)
Repayment of finance lease obligations                     (16,506)   (16,972)
Acquisition of treasury shares                             (41,465)          -
Dividends paid by subsidiary to non-controlling
shareholders                                                      -      (602)
Net cash flows from financing activities                   (20,189)   (25,375)
Net (decrease)/increase in cash and cash equivalents       (15,363)     89,106
Net foreign exchange difference                               2,221         65
Cash and cash equivalents at 1 January                       94,758     39,321
Cash and cash equivalents at 30 September                    81,616    128,492
Non-cash transactions
Additions of property, plant and equipment under finance
leases                                                       23,572     10,401
Additions of property, plant and equipment financed
through direct bank-lender payments to the vendor            73,233     43,868
Property, plant and equipment purchased for credit            1,957      9,685

On behalf of the Board:

Chief Executive
Officer
Yuriy Kosyuk

Chief Financial
Officer
 Viktoria Kapelyushnaya

                                      

  The accompanying notes on the pages 8 to 16 form an integral part of these
             interim condensed consolidated financial statements

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

for the nine-month period ended 30 September 2012

(in thousands of US dollars, unless otherwise indicated)

1. Corporate information

MHP S.A. (the "Parent"  or "MHP S.A."), a  limited liability company  (société 
anonyme) registered under the laws of Luxembourg, was formed on 30 May  2006. 
MHP S.A.  was  formed  to  serve  as the  ultimate  holding  company  of  PJSC 
"Myronivsky Hliboproduct" ("MHP") and its subsidiaries. Hereinafter, MHP  S.A. 
and its subsidiaries are referred to as the "MHP S.A. Group" or the  "Group". 
The registered  address  of  MHP  S.A.  is  5,  rue  Guillaume  Kroll,  L-1882 
Luxembourg.

The controlling shareholder of MHP S.A. is the Chief Executive Officer of  MHP 
S.A. Mr. Yuriy Kosyuk ("Principal Shareholder"),  who owns 100% of the  shares 
of WTI Trading Limited ("WTI"), which is theimmediate majority shareholder of
MHP S.A.

The principal  business  activities  of  the Group  are  poultry  and  related 
operations, grain  growing, as  well as  other agricultural  operations  (meat 
processing, cultivation  and  selling  fruits  and  producing  beef  and  meat 
products ready for consumption). The  Group's poultry and related  operations 
integrate all  functions  related  to the  production  of  chicken,  including 
hatching,  fodder   manufacturing,   raising  chickens   to   marketable   age 
("grow-out"), processing and marketing of branded chilled products and include
the production and sale of chicken  products, sunflower oil, mixed fodder  and 
convenience food products. Grain growing comprises the production and sale of
grains.Other agricultural  operations comprise  the production  and sale  of 
cooked meat, sausages,  beef, milk,  goose meat,  foie gras,  fruits and  feed 
grains. During  the  nine-month  period  ended 30  September  2012  the  Group 
employed about 25,000 people (31 December 2011: 24,800 people).

The Group has been undertaking a large-scale investment program to expand  its 
poultry and related operations, and in May 2010, commenced construction of the
greenfield Vinnytsya poultry  complex. During the  nine-month period ended  30 
September 2012  construction  works  at Vinnytsya  complex  was  performed  as 
scheduled.

The primary subsidiaries,  the principal activities  of the companies  forming 
the Group and  the Parent's effective  ownership interest as  of 30  September 
2012 and 31 December 2011 were as follows:

                                                                                              31
                 Country of                 Year                                     30 December
Name           registration established/acquired     Principal activities September2012     2011
Raftan Holding
Limited              Cyprus                 2006      Sub-holding Company        100.0%   100.0%
                                                    Management, marketing
MHP                 Ukraine                 1998               and sales         99.9%    99.9%
Myronivsky
Zavod po
Vygotovlennyu                                       Fodder and sunflower
Krup i
Kombikormiv         Ukraine                 1998          oil production         88.5%    88.5%
Peremoga
Nova              Ukraine                 1999             Chicken farm         99.9%    99.9%
Druzhba
Narodiv Nova        Ukraine                 2002             Chicken farm         99.9%    99.9%
Oril-Leader         Ukraine                 2003             Chicken farm         99.9%    99.9%
Tavriysky
Kombikormovy
Zavod               Ukraine                 2004        Fodder production         99.9%    99.9%
Ptahofabryka
Shahtarska
Nova                Ukraine                 2003             Breeder farm         99.9%    99.9%
Myronivska
Pticefabrica        Ukraine                 2004             Chicken farm         99.9%    99.9%
Starynska
Ptahofabryka        Ukraine                 2003             Breeder farm         94.9%    94.9%
Ptahofabryka
Snyatynska
Nova                Ukraine                 2005       Geese breeder farm         99.9%    99.9%
Zernoproduct        Ukraine                 2005        Grain cultivation         89.9%    89.9%
                                                    Fodderproduction and
Katerynopilsky                                   grainstorage,sunflower
Elevator            Ukraine                 2005           oil production         99.9%    99.9%
Druzhba                                            Cattle breeding, plant
Narodiv             Ukraine                 2006              cultivation         99.9%    99.9%
Crimean Fruit                                            Fruits and grain
Company             Ukraine                 2006              cultivation         81.9%    81.9%
NPF Urozhay         Ukraine                 2006       Grain cultivation         89.9%    89.9%
Agrofort            Ukraine                 2006       Grain cultivation         86.1%    86.1%
Urozhayna
Krayina             Ukraine                 2010       Grain cultivation         99.9%    99.9%
Ukrainian
Bacon               Ukraine                 2008          Meat processing         79.9%    79.9%

The Group's  operational  facilities  are  located  in  different  regions  of 
Ukraine, including Kyiv,  Cherkasy, Dnipropetrovsk, Donetsk,  Ivano-Frankivsk, 
Vinnytsya, Kherson,  Sumy,  Khmelnitsk  regions  and  Autonomous  Republic  of 
Crimea.

Notes to the INTERIM CONDENSED Consolidated financial statements

for the nine-month period ended 30 September 2012

(in thousands of US dollars, unless otherwise indicated)

2. Basis of preparation and accounting policies

Basis of preparation

The interim  condensed consolidated  financial statements  for the  nine-month 
period  ended  30  September  2012  have  been  prepared  in  accordance  with 
International Accounting Standard 34 "Interim Financial Reporting".

Certain information and footnote disclosures normally included in consolidated
financial statements  prepared  in  accordance  with  International  Financial 
Reporting Standards ("IFRS")  have been condensed  or omitted. However,  such 
information  reflects  all   adjustments  (consisting   of  normal   recurring 
adjustments), which are, in the opinion of the Group management, necessary  to 
fairly state  the  results  of  interim  periods.  Interim  results  are  not 
necessarily indicative of the results to be expected for the full year.

The 31 December  2011 statement  of financial  position was  derived from  the 
audited consolidated financial statements.

Functional and presentation currencies

The functional  currency  of  the  Group is  the  Ukrainian  Hryvnia  ("UAH"). 
Transactions in currencies other than the functional currency of the Group are
treated as transactions in foreign currencies. Such transactions are initially
recorded at the  rates of exchange  ruling on the  dates of the  transactions. 
Monetary assets and liabilities denominated in such currencies are  translated 
at the  rates prevailing  on the  statement of  financial position  date.  All 
realized and unrealized gains and  losses arising on exchange differences  are 
included in the consolidated statement of comprehensive income for the period.

These interim condensed consolidated financial statements are presented in US
Dollars ("USD"), which is the Group's presentation currency.

The results and financial position of the Group are translated into the
presentation currency using the following procedures:

· Assets  and  liabilities  for  each  statement  of  financial  position 
presented are translated at the closing rate as of the date of that  statement 
of financial position;

· Income  and expenses  for each  statement of  comprehensive income  are 
translated at exchange rates at the dates of the transactions;

· All  resulting  exchange  differences  are  recognized  as  a  separate 
component of equity.

For practical reasons, the Group translates items of income and expenses for
each period presented in the financial statements using the quarterly average
rates of exchange, if such translations reasonably approximate the results
translated at exchange rates prevailing at the dates of the transactions.

The following exchange rates were used:

         Closing rate                                             Closing rate
             as of 30    Average for Closing rate     Average for     as of 31
            September    nine months    as of 31      nine months     December
                            ended 30     December        ended 30         2010
Currency         2012 September 2012         2011 September 2011
UAH/USD        7.9930         7.9904       7.9898          7.9626       7.9617
UAH/EUR       10.2902        10.2341      10.2981         11.2030      10.5731

Significant accounting policies

The accounting policies adopted in the preparation of the interim condensed
consolidated financial statements are consistent with those followed in the
preparation of the Group's annual financial statements for the year ended 31
December 2011.

Seasonality of operations

Poultry and related operations  as well as  other agricultural operations  are 
not significantly exposed to the seasonal fluctuations.

Grain growing segment, due to seasonality  and implications of IAS 41, in  the 
first  half  of  the  year  mainly  reflects  the  sales  of  carried  forward 
agricultural produce and effect of biological assets revaluation, while during
the second  half  of  the year  it  reflects  sales of  crops  and  effect  of 
revaluation of agricultural  produce harvested  during the  year. Also,  grain 
growing segment has seasonal requirements for working capital increase  during 
November - May, due to sowing campaign.

Notes to the INTERIM CONDENSED Consolidated financial statements

for the nine-month period ended 30 September 2012

(in thousands of US dollars, unless otherwise indicated)

3. Segment information

The following  table presents  revenue and  profit information  regarding  the 
Group's operating segments for the nine-month period ended 30 September 2012:



                   Poultry
                                               Other
               and related   Grain      agricultural
                operations growing        operations Eliminations Consolidated
External sales     801,134 126,065           116,498            -    1,043,697
Sales between
business
segments            26,330  95,240             4,088    (125,658)            -
Total revenue      827,464 221,305           120,586    (125,658)    1,043,697
Segment
results            245,109 100,669             3,894            -      349,672
Unallocated
corporate
expenses                                                              (23,820)
Other
expenses, net                                                         (39,856)
Profit before
tax                                                                    285,996
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