MHP Net Profits Fell by Two Thirds and a Warehouse was Destroyed

MHP reports stable volumes of poultry meat production – but not steady profits compared to the same period last year. 

The parent company of a leading international agro-industrial group with headquarters in Ukraine reported just a 4 percent decrease in revenues in its 2024 first quarter report:  $719 million compared to $746 million in the previous year. 

Overall net profit decreased, largely due to depreciation of the Ukrainian Hryvnia against both the US dollar and euro, according to the company’s report published on the London Stock Exchange website. 

The company lost $40 million because of losses in foreign exchange. 

Poultry meat production remained stable at 178.5 tons, compared with MHP’s other European operations which reported increases in production of 7 per cent at almost 34,000 tons. 

MHP’s directors decided not to declare a final dividend for the 2023 financial year or an interim dividend for the three-month period ending on March 31. The reason for this lies in war-related uncertainties and the resulting need to preserve liquidity, report says. 

On May 17, Russia’s attacks destroyed a warehouse of MHP frozen chicken meat products partly leased by the company in Odesa region. 

This resulted in loss of poultry products worth $8 million (book value - around US$ 7 million) – but no employees were declared as being injured. At the same time, all of the company’s production facilities in Ukraine continue to operate at close to full capacity.

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MHP increased its war-related costs in the first quarter – $10 million compared to $6 million in the same period last year. This includes alternatives needed to replace lost energy supplies from the national grid when electricity shortages happen and other necessary arrangements. 

“We can give no assurance that this will not occur in the future and that our production facilities and the infrastructure that we use will not become a target of new attacks”, MHP wrote in its report, stating it will immediately protect its employees and restore production in case of more damage caused by Russia. 

But the company believes “the Group has adequate resources to continue in operational existence for the foreseeable future”.