MHP (MHPC) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue rose 8% year-over-year to $779 million, with growth across all segments despite a challenging macro environment and ongoing conflict in Ukraine.

• Net profit doubled to $32 million from $16 million in Q1 2024, mainly due to foreign exchange gains and margin stabilization.

• Gross profit declined 4% year-over-year to $163 million, reflecting weaker poultry and vegetable oil margins.

• Operating profit declined 29% year-over-year to $60 million, impacted by lower gross profit and higher war-related expenses.

• The company is actively expanding in Europe, including the acquisition of Spain's UVESA Group and Ukrainskyi Miasnyi Khutir.

Financial highlights

• Adjusted EBITDA (net of IFRS 16) for Q1 2025 was $111 million, a 7% year-on-year decrease, with margin down to 14%.

• Net profit increased to $32 million, driven by FX gains, while operating profit and gross margin declined.

• Cash flow from operations before working capital changes rose to $101 million from $90 million in Q1 2024.

• Total CAPEX in Q1 was $60 million, focused on maintenance, modernization, and European expansion.

• Net cash from operating activities was $45 million, down from $102 million in Q1 2024.

Outlook and guidance

• The company expects continued inflationary pressure on production inputs and rising grain prices, with future results potentially affected by war-related challenges.

• Profitability in the vegetable oil segment is expected to remain low in 2025 due to high input costs and low oil prices.

• Export volumes to the EU are anticipated to decrease in 2025 due to the reimposition of trade quotas and expiration of EU Autonomous Trade Measures.

• Working capital normalization is expected in Q2 2025 after a temporary increase in receivables.

• Ukrainian GDP is forecast to grow 3.1–3.6% in 2025, with inflation at 8.4%.