MHP said it was on track for a "good set" of full-year results, helped by crop yields well ahead of the Ukraine average, and consumers' quest for cheaper meats amid the economic downturn.

Yiriy Kosyuk, MHP's chief executive, said the grain-to-meat producer was looking "to cement [its] position as Ukraine's leading agro-industrial business" as it reported a 27% rise in revenues, in Ukraine hryvnia (UAH) terms, in the April-to-June period.

The increase reflected growth in volumes and prices at the group's poultry division, which raised output through a plant expansion and sold nearly all chicken produced.

"Demand for chicken meat remained high as consumers continued to substitute other meats with locally produced chicken," MHP said.

Grain harvest 

The group added that it expected higher poultry prices to stay firm for the rest of the year, when results would also be boosted by crop revenues.

MHP's grain arm, which farms on 155,000 hectares, harvested 38,300 tonnes of rapeseed at a yield of 2.7 tonnes per hectare, two-third higher than the Ukraine average.

Of this, 33,000 tonnes had been sold forward at $375 per tonne.

While the group failed to give a figure for wheat production, it noted a yield of 5.7 tonnes per hectare, ahead of the national average of 3.2 tonnes per hectare, and unveiled forward export sale of 75,000 tonnes of milling wheat, at $150 per tonne.

MHP, which is also grows sunflowers and corn to feed its chickens, said it expected yields from its ongoing harvest "to be higher than Ukraine's average across all crops".

Market reaction

Revenues hit UAH1.30bn in the quarter, up from UAH1.02bn a year before, although a fall in government grants dragged earnings 11% lower to UAH390m.

In dollar terms, revenues fell by 17% and earnings by 42%, thanks to exchange rate movements.

The company added that its reliance on home-grown crops for animal feed, and its rising meat processing volumes, meant it was "well positioned to tackle the volatile market conditions and achieve a good set of financial results for the full year".

MHP shares clsoe up $0.20 higher at $9.20 in London.