Agriculture
March 29, 2011
MHP S.A.: Profi t Up Despite Slip in Margins - MHP’s FY10 financial results feature a 33% YoY rise in revenues to USD 944mn and a similar 35% jump in net profit to USD 215mn. The company’s EBITDA was also up by 20% YoY to USD 325mn. Gross margin declined by 4p.p. YoY to 31% due to higher prices for corn feed, the major input cost in poultry production, while net margin remained flat at 23%. The results were in line with our expectations and we therefore leave our forecasts for MHP unchanged. We model revenue growth at a 20102015 CAGR of 13.5% with an average EBITDA margin of 34% over the period, down from 38% in 2009. We reiterate our BUY recommendation on the MHPC stock with a target price of USD 24.0 per share.
