Ukraine processor reports improvements in profitability

By Vladislav Vorotnikov

- Last updated on GMT

Related tags Meat Poultry

Ukraine processor reports improvements in profitability
The largest poultry producer in Ukraine, Mironivsky Hliboproduct (MHP), has reported improved financial performance despite decreasing production.

MHP said that, in the first half of 2012, it reduced production of finished meat products to 16,510 tonnes (t), a 4.6%, or 790t drop compared to the same period last year. Volume sales of poultry also declined by 0.3% to 181,600t.

However, the company forecast an increase in profitability due to higher prices in the domestic market.

According to estimates from the company’s experts, the price of finished meat products in the Ukraine increased by 15.4% to UAH21.83  (US$2.69) per kg (excluding VAT) in the first half of 2012, up from UAH18.91 (US$2.33) per kg in the same period in 2011. The price of chicken increased by 27.5% to UAH17.14 (US$2.11) per kg compared to first half of last year.

“Consumer demand for poultry meat has remained high throughout the first half of the year, and the company sells about 100% of its production. Also, the volume of exports of chicken meat has continued to increase momentum in the first half of 2012 and reached almost 20,000t, which is 30% higher than in the first half of 2011,”​ said a spokesperson.

MHP’s performance reflects the situation in the whole meat and poultry industry in the Ukraine. According to official statistics, meat production in Ukraine in January-June 2012 decreased by 1% compared with the level of January-June 2011, to 1.437mt liveweight. However, a systematic crisis at the beginning of the year and rising grain prices meant that meat prices have increased by an average of 18% since the beginning of the year.

“In such a situation, large agricultural holdings like MHP receive a large benefit, because all the company’s businesses have closed production cycles and its own feed mills, meaning they are less affected by the situation in the grain market,”​ said experts at the Russian analytical agency Agrorucom. 

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