News
19.11.2009
Ukraine's MHP to take on 20,000 more hectares
MHP has said it is to take on extra land, and signalled ambitions to further raise its yields, after a "strong performance" by its grain division.
The Ukraine sunflowers-to-sausages group, which meets most of its chicken feed requirements from its own crops, said it would take on an extra 20,000 hectares before the end of this year, increasing its arable land by 13%.
However, the group, which highlighted its "effective land cultivation", forecast its crop production growing by 20%, which a company spokesman confirmed signalled an ambition to improve on yields too.
MHP outperformed the Ukraine average handsomely in all four of its major crops – corn, rape, sunflowers and wheat – although yields did not appear to bear out the claim by chief executive Yoriy Kosyuk of being "record breaking across all crops".
While MHP improved on corn and sunflower yields, those for rapeseed and wheat fell year on year, comparison with data from the company's 2008 annual report shows.
Chicken vs beef
MHP's ambitions go against the moves of some other Ukraine farm groups, such as Landkom, which have cut back landbanks in response to lower crop prices, tighter credit and a weaker domestic grain harvest.
MHP's own earnings slid by 69% to 103 hryvnia in the July-to-September quarter, despite a 25% rise to 1.55bn hryvnia in revenues, as the group swallowed a cut in government grants and a 250m hryvnia foreign exchange loss.
While the group operates in hryvnia, it reports in US dollars, also the currency in which its shares trade.
The rise in revenues reflected a jump in poultry sales fuelled by expansion to its farming capacity, with strong domestic demand allowing it to sell all of its chicken production.
"Ukraine market conditions remain highly favourable, as consumers continue to substitute other kinds of meats, especially beef… with locally produced chicken," Mr Kosyuk said.
Share reaction
The group added that it was "well positioned to tackle the volatile market conditions", and said it was on course for a "good set" of full year results.
MHP shares stood 2.2% higher at $11.50 in morning trade in London.
Agrimoney
