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Ukraine’s MHP Expects Unchanged 2013 Ebitda, CFO Says

Mironovskiy Hleboproduct SA (MHPC), Ukraine’s biggest poultry producer, expects this year’s Ebitda to be unchanged from 2012, after a first-quarter decline, by boosting chicken production and planting more grain.

“We have drivers for stabilization,” said MHP Chief Financial Officer Viktoria Kapelyushnaya said in a phone interview today after the company published its first-quarter results. “We will produce more chicken and more grain. In the face the kind of difficult conditions we have in Ukraine, we will have a stable result this year.”

Earnings before interest, tax, depreciation and amortization fell 13 percent to $73 million in the last quarter, while average chicken meat prices fell 3 percent, the company said today. Net income dropped 24 percent to $36 million as the cost of grain rose.

Ukraine exited a six-month recession in the first quarter when the economy rose 0.5 percent from the preceding three-month period. Gross domestic product shrank 1.3 percent from year ago and industrial output fell 5 percent. Inflation declined annual 0.8 percent and did not change in April from March.

MHP has a “conservative forecast” and expects chicken prices to stay at the same level by year’s end, Kapelyushnaya said. “The cost has risen, but inflation is unchanged.”

MHP expects to cut poultry costs after the Vinnytsya facility starts operating to full capacity and helps push the cost further down by the end of 2013 and 2014, Kapelyushnaya said.

Corn Yield

MHP, which added 70,000 hectares to its grain-growing operation this year, expects to have its average yield for corn and sunflower to be much higher than average in Ukraine, Kapelyushnaya said without elaborating on harvest forecast.

Poultry exports will account for between 25 percent and 30 percent of all sales in 2013, compared with 24 percent in the first quarter, according to Kapelyushnaya.

MHP expects to resume poultry deliveries to Russia in one week or 10 days, Kapelyushnaya said. Temporary poultry-export limits were applied to MHP and other companies this month to check the meat after reports by Russian food safety agency about a possible bacteria infection.

MHP reduced the share of its shipments to Russia and Kazakhstan from 85 percent last year to less than 50 percent this month, CFO of MHP said today.

“The main task for export is diversification,” Kapelyushnaya said. The company is seeking to increase supplies to Middle East and Africa.

MHP is planning to pay dividends this year and the size will be announced by year-end, CFO Kapelyushnaya said.

MHP shares rose for the first time since May 3 to $18.82 per share in London today, Bloomberg data shows.

To contact the reporters on this story: Kateryna Choursina in Kiev at kchoursina@bloomberg.net; Daryna Krasnolutska in Kiev at dkrasnolutsk@bloomberg.net

To contact the editors responsible for this story: James M. Gomez at jagomez@bloomberg.net; Balazs Penz at bpenz@bloomberg.net

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