OREANDA-NEWS. MHP S.A. ("MHP" or the "Company", LSE ticker: "MHPC"), one of the leading agro-industrial companies in Ukraine, focusing on the production of poultry and the cultivation of grain, today announces its financial results for the first quarter 2014 ended 31 March 2014.

Key operational highlights

Poultry

o Currently 9 from 12 production sites at the Vinnytsia complex are operational at full capacity.

o Owing to increasing production volumes at Vinnytsia during 2013, MHP's overall production volumes of chicken meat in Q1 2014 increased by approximately 30% year-on-year. Sales of chicken meat to third parties in Q1 2014 increased by 22% reaching 112,270 tonnes compared to 91,720 tonnes in Q1 2013.

o Domestic sales volume increased by 20% and export sales volume increased by 31% to 30,370 tonnes, compared to 23,200 tonnes in Q1 2013.

o As poultry exports to Custom Union territories were banned during Q1, MHP continued to diversify its export markets by substituting sales to Middle Eastern, Asian, African and some CIS countries.

o The average chicken meat price, and export prices, remained at approximately the same level in Q1 2014 as in Q4 2013. The average Q1 price decreased by 4% year-on-year to UAH 15.61 per kg of adjusted weight (excluding VAT), mostly due to lower export prices year-on-year.

o Due to the increased production of fodder a t Vinnytsia, MHP's sales of sunflower oil in Q1 2014 grew by 37% to 67,520 tonnes compared to 49,310 tonnes in Q1 2013. In line with international commodity prices, the average price per tonne of sunflower oil decreased by 26% to USD 853 compared to USD 1,149 in Q1 2013.

Grain Growing

MHP's 2014 spring sowing campaign is almost complete and all winter crops (winter wheat, rapeseeds, barley and rye) are in good condition.

o Driven by an increased land bank and current favorable weather conditions, MHP expects a strong harvest in 2014.

Other Agricultural

Sales volume of processed meat products in Q1 2014 declined to 6,856 tonnes compared to 7,340

tonnes in Q1 2013 due to ongoing product mix optimization.

o The average price for sausages and cooked meat in Q1 2014 increased by 7% to UAH 24.10 per kg (excluding VAT) compared to UAH 22.51 in Q1 2013.

Key financial highlights Q1 2014

Revenue increased by 2% to USD 309 million (Q1 2013: USD 304 million).

EBITDA increased by 45% to USD 106 million (Q1 2013: USD 73 million), mostly driven by higher poultry production volumes and a decline in poultry production costs.

o The 37% devaluation of the Hryvna during the quarter resulted in non-cash foreign exchange translation losses of USD 366 million.

o Net profit before FX losses in Q1 2014 increased by 64% to USD 51 million compared to USD 31 million in Q1 2013. After FX losses, the net loss amounted to USD 316 million (Q1 2013: profit of USD 36 million).

Commenting on the results, Yuriy Kosyuk, Chief Executive Officer of MHP, said:

"I'm pleased to report that, despite the challenging macroeconomic and political situation in Ukraine, in the first quarter of 2014 the Company continued to grow and develop.

During the first quarter, poultry production increased by 30% year-on-year, and our sales volumes grew substantially, both domestically and in export markets. Export sales increased by over 30% during the reporting period. The Company continues to focus its growth strategy on exports, through increasing both sales volumes and geographic diversification. During the period we significantly increased our sales to Middle Eastern, Asian, African and some CIS countries, which compensated for reduced sales to the Custom Union.

Our vertical integration business model also contributed to our strong financial results. As a result of lower priced crops harvested in 2013, poultry production costs decreased significantly in the first quarter 2014. We anticipate this trend will continue during the whole year.

We have started 2014 with optimism supported by strong results, which create a sound platform for future progress in operational and financial performance."