MHP posts a US$230 million loss for 2022
Ukrainian’s largest poultry processor, MHP, sustained a net loss of US$231 million in 2022 against a net profit of US$393 million in the previous year, the company said in its annual report. But, the company returned to profitability, generating US$38 million net profit in the fourth quarter of 2022.
MHP estimated that “substantial war-related costs since the Russian invasion on 24 February 2022” amounted to US$69 million last year. This figure includes community support donations, write-offs of inventories and biological assets, and other specific war-related expenses.
Working with volunteers since the beginning of the hostilities, MHP has provided extensive humanitarian aid, including the free supply of around 12,000 tonnes of poultry products to the population of Ukraine.
Fears of escalation
As the conflict shows no signs of letting up, MHP said there are further risks to its operation in 2023.
“The war in Ukraine continues and may escalate further in the coming months. There are ongoing risks to the company’s operations due to recurring attacks on the critical infrastructure of Ukraine. However […] MHP’s production facilities in Ukraine continue to operate at close to full capacity,” MHP said in the report.
Exports bounce back
MHP also claimed that it managed to rebuild the logistics profoundly impacted by the conflict and restore export operations. It said that poultry exports in the fourth quarter of 2022 increased by 6% year-on-year, mainly driven by an intentional decrease of poultry stocks in non-resident warehouses, which accumulated in significant volumes during 2022 to secure stable export contracts.
“After transforming its logistics arrangements in response to evolving wartime circumstances, the company is again exporting to over 70 countries, providing grain, vegetable oils and poultry meat worldwide. To date, MHP’s own facilities have not sustained any physical damage as a result of war,” MHP added.
Vague prospects
In the first quarter of 2023, MHP was successful in maintaining operations at close to full capacity, the company said, however, that things remain as vague as ever: “As the overall situation in Ukraine continues to be fluid, we are unable to provide any meaningful guidance as to the outlook for the poultry segment for the 2023 full year.”
In the event of any adverse impact to its operations, MHP said it had comprehensive contingency plans in place, ensuring that it is ready to take any actions necessary “to rebuild, restore and re-start production in the shortest time possible”.
