MHP (MHPC) Q3 2024 earnings summary

Executive summary

• Revenue for 9M 2024 was stable at $2.3 billion, with export sales contributing 54–60% and all production facilities operating near full capacity despite the ongoing war in Ukraine.

• Gross profit rose 35% to $627 million, driven by higher agricultural profitability, while net profit for 9M 2024 reached $141 million, up 16% year-over-year.

• War-related costs totaled $38 million in nine months, with over 3,300 employees mobilized and no significant physical damage reported.

• The business environment remained highly volatile, with frequent infrastructure attacks and significant operational risks.

• Q3 2024 revenue grew 5% year-over-year to $773 million, with net profit surging 75% to $111–$173 million.

Financial highlights

• Adjusted EBITDA for 9M 2024 was $437 million, up 33% year-over-year, with Q3 Adjusted EBITDA rising 56% to $173 million.

• Net profit margin for 9M 2024 was 6%, up from 5% in 2023; gross margin improved to 28%.

• Net debt/LTM EBITDA ratio stood at 2.1–2.12x, with net debt at approximately $1.2 billion.

• Cash and cash equivalents at period end were $327 million, with 92% of debt classified as long-term.

• Total CapEx for 9M 2024 was $114–$217 million, with full-year CapEx expected at $300–$310 million.

Outlook and guidance

• Full-year 2024 EBITDA is expected around $500 million; 2025 EBITDA guidance is conservatively set at $450 million due to rising production costs.

• CapEx for 2025 projected at $250–$270 million, with about half for maintenance and compliance, and $10–15 million for energy projects.

• Cost of production expected to rise by about 30% in 2025, mainly from higher energy, protein, and commodity prices.

• No interim or final dividend declared for 2024, prioritizing liquidity preservation.

• Management believes the group has adequate resources to continue operations, but material uncertainty remains due to the unpredictable effects of the ongoing war.