REG - MHP SE - UPDATE ON EFFECTS OF THE RUSSIAN INVASION

MHP SEAnnouncement

04/03/2022 10:45

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RNS Number : 6925D  MHP SE  04 March 2022

 

 

 

 

04 March 2022

Limassol, Cyprus

 

MHP SE

UPDATE ON EFFECTS OF THE RUSSIAN INVASION OF UKRAINE

 

MHP SE, the parent company of the international food and agricultural group
with headquarters and principal operations in Ukraine ("MHP", "The Company" or
"The Group"), provides an update on the effects on the Company of the invasion
of Russian armed forces into Ukraine.

MHP is one of the largest food producers in Ukraine, employing more than
26,000 people and supplying approximately 300,000 tonnes of chicken meat
annually in Ukraine, representing around half of all chicken produced
commercially for the domestic market.

Production and Sales

MHP's poultry production facilities have not suffered any physical damage to
date, and thus far the Company is not aware of any casualties among its
employees, although it has received reports of some casualties among their
relatives.

While MHP continues commercial sales in Ukraine, export sales have ceased
because of ports being closed, at the same time export delivery with trucks is
practically impossible. Currently delivery across Ukraine is highly
problematic due to lack of drivers and fuel and practically impossible to the
regions which are under heavy fire ("red zones").

As MHP is currently not being able to export, production facilities have been
running at a lower utilisation to fully satisfy domestic consumption in
poultry meat, with some excess stock being frozen.

On the domestic market, MHP continues to supply the local retail chains and
institutions (army, hospitals, etc.), with some meat being distributed in most
affected areas on a free-of-charge basis.

As already mentioned, due to port closure, production at the Company's
sunflower and soybeans processing plants has been suspended while storages are
full.  As a result, a majority of poultry feed consists of corn.

MHP continues to undertake all steps necessary to ensure that full production
in all its operations which can be resumed once the situation stabilises.

Collection of payments from our customers generally continues, albeit with
difficulties.

Employees

We are proud of and extremely grateful to our people who continue to work
under duress every day to ensure food supply to Ukraine. MHP has continued to
pay all its employees in full and will continue to support them by all
practical means.

MHP is assisting Ukrainian families with evacuation outside of Ukraine such as
transportation, housing and legal support.

Supply chain

Although we are experiencing extreme disruptions in the supply chain, the
Company is continuing to pay key Ukrainian suppliers for critical goods and
services (e.g. utilities) to ensure viability of its supply chain. The Company
is already experiencing disruption in the supply of feed additives (minerals,
vitamins etc), which is mainly driven by the logistic problems. The MHP team
has undertaken all necessary steps and is in cooperation with suppliers to
facilitate the delivery as soon as it is possible.

Financial impact

Overall, currently MHP is experiencing severe reduction in revenue and
associated losses which we expect to continue for the duration of the conflict
and some months after hostilities cease.

Reporting

The Group's auditors, Ernst & Young, have agreed that in the current
circumstances it will be impossible to complete the 2021 audit for an
indeterminate period.  We therefore anticipate having to defer the
announcement of results from the previously planned date of 24 March 2022.
The Company will make every effort to report as soon as practically possible;
a new date will be announced in due course.

European Operating Segment

The Group's European operations at Perutnina Ptuj have not been affected in
any way by events in Ukraine, as they are fully independent and
self-sufficient from an operational and supply chain perspective, and continue
to produce at full capacity.

 

This press statement is providing you with information and conditions of
operations as it stands today. The Group will make a further announcement as
and when appropriate.

 

 

For further information, please contact:

Anastasiia Sobotiuk, Director of
IR                            +386 41 30 72 65

a.sobotyuk@mhp.com.ua (mailto:a.sobotyuk@mhp.com.ua)

Dr John Rich, Executive
Chairman                             +38 050 312
13 35

j.rich@mhp.com.ua (mailto:j.rich@mhp.com.ua)

 

John Grant, Senior Independent Director             +44 7768 465
042

j.grant@mhp.com.cy (mailto:j.grant@mhp.com.cy)

 

 

 

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