Business Financial Results for Q4 and 12M 2018
During 2018, MHP has been launching new production sites of Phase 2 of the Vinnytsia Poultry Complex, which included from the end of May until the end of December, three rearing sites (brigades) commenced operations and since being commissioned at the beginning of July, the slaughterhouse has gradually increased its capacity utilization.
In Q4 poultry production reached 159,431 t, up 13% (Q4 2017: 141,544 tonnes). The average price of chicken meat, at UAH 40.56 per kg, remained relatively stable year-on-year (Q4 2017: UAH 40.71 per kg) (excluding VAT). Chicken meat exports totaled 72,929 t, an increase of 62% (Q4 2017: 45,042 t).
In 2018 poultry production reached 617,943 t, up 9% (12M 2017: 566,242 t). The average price of chicken meat increased by 12% year-on-year to UAH 39.86 per kg excluding VAT (12M 2017: UAH 35.63 per kg) (excluding VAT). Chicken meat exports increased by 30% to 286,846 t (12M 2017: 220,983 t), mainly as a result of increased sales to countries in the MENA and the EU countries.
2019 is expected to be turbulent in relation to global markets and trade flows, making market predictions more challenging. Against this backdrop, MHP will continue to develop and deliver upon its long-term growth strategy.
This is being achieved by two means: firstly, generating export growth, both organically, focusing on distribution and routes to market, and by targeted acquisitions; secondly, by MHP’s domestic focus on higher value-added products. This gradual domestic shift to higher-margin products will be driven by the strategic substitution of lower-margin frozen chicken in favour of higher-margin consumer-driven meat product sales.
MHP continues to be well-positioned to deliver further increases in both revenue and profit in 2019, driven by increasing production, mainly from the Poultry and Related Operations Segment and its recent acquisition of Perutnina Ptuj in the Balkans.