Agriculture
November 20, 2014
Despite the continued weakness of the Ukrainian hryvnia, MHP was able to improve its EBITDA in 3Q14 by 47% YoY to USD 181mn and has raised its FY14 EBITDA guidance to USD 540mn. Thanks to the strong EBITDA, the company’s leverage ratio has fallen to 2.1x. MHP managed to expand its export poultry sales by 48% YoY in 3Q14 despite zero sales to Russia since February. A USD 250mn IFC credit line should allow MHP to redeem its 2015 Eurobond issue on time, while growth in export sales and increase in poultry selling price in UAH terms in 2015 should compensate for higher poultry production cost caused by devaluation. We confirm our BUY recommendation for the MHPC stock.
