1st Quarter Results

PRESS RELEASE

May 12, 2011, Kyiv, Ukraine

MHP S.A.

Financial Results for the First Quarter of 2011ended March 31, 2011

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 2011 ended 31 March 2011.

Key operational highlights

Poultry

o During the quarter, consumer demand for chicken remained high; all MHP's poultry production units continued to operate at 100% of capacity and the Company was able to sell close to 100% of the chicken produced.

o The average chicken meat sales price to third parties in Q1 2011 increased by almost 4% to UAH 12.83 per kg of adjusted weight compared to Q1 2010 (UAH 12.38 per kg), in line with global meat market trends.

o The average sales price of sunflower oil in Q1 2011 increased by 54% to US$ 1,306 per tonne (Q1 2010: US$ 850 per tonne).

Grain Growing

o The Company's winter crops in cultivation on approximately 70,000 hectares are in good condition.

o MHP's spring sowing campaign is almost complete.

o In total, the Company expects to harvest in 2011 from 60% more land in its grain growing segment compared with 2010.

Other Agricultural

o Sales volumes of processed meat products, the main driver in this business segment, increased by 27% to 7,900 tonnes in Q1 2011 compared to Q1 2010 (6,200 tonnes).

Vinnytsia - new green field expansion project

o Construction work on the Vinnytsia project, which commenced as announced previously in May 2010, is running to schedule and on budget.

Key financial highlights Q1 2011

o Revenue increased by 23% to US$ 247 million (Q1 2010: US$ 200 million).

o EBITDA increased by 15% to US$ 57 million (Q1 2010: US$ 49 million).

o Net income from continuing operations decreased by 46% to US$ 19 million (Q1 2010: US$ 36 million) due to the net effect of non-cash foreign exchange losses/gains driven by increase in Euro to Dollar exchange-value correlation .

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

"We are pleased with the performance of the business over the first quarter of the year. We have once again achieved strong revenue and EBITDA growth, whilst at the same time generating sector-leading margins.Our vertically integrated business model, where we combine poultry production with grain growing, ensures that we are in control of all aspects of our operations thereby protecting us from rising grain prices.

Currently the Company produces over 60% of chicken meat at its recently launched Myronivka poultry farm, and enjoys the benefits of this green field project with a high level of energy efficiency, labor productivity and cost control. This clearly differentiates us from our competitors.

I am also pleased to provide you today with a detailed update on the progress that is being made at our new poultry production complex at Vinnytsia. Construction work commenced in May 2010 and is running to schedule and on budget. When complete, Vinnytsia Complex will be the largest poultry production facility in Europe. It will further cement our market leading position not only in Ukraine but in Europe in the future. Our new green field Vinnytsia project is expected to be even more efficient than Myronivka poultry farm in terms of energy, labor and logistic costs.

Looking ahead, demand for our products is high and the overall market environment in Ukraine remains favorable for our business. We are therefore confident that we will be able to continue to implement our strategy and keep on delivering strong financial results."

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MHP's management will host a conference call for investors and analysts followed by a Q&A session. The dial-in details are:

The dial-in details are:

Date: Thursday, 12 May 2011

Time: 16.00 Kyiv / 14.00 London / 9.00 New York / 17.00 Moscow

Title: MHP - Q1 2011 FINANCIAL RESULTS

Conference ID 61723056

The participants will be asked for their full name and conference ID.

UK Standard International +44 (0) 1452 555 566

UK Free Call 0800 694 0257

Russia Free Call 8108 002 097 2044

USA Free Call 1866 966 9439

A live webcast of the presentation will be available at:

https://webconnect.webex.com/webconnect/onstage/g.php?t=a&d=667091263

Attendees can login 15 minutes prior to the official start time. Attendees that are having login problems are advised to dial-in to the audio part of the call and ask the Operator to let them speak to the Web Technician.

Click on "Unlisted Events"

Event number: 667091263

For further information please contact:

Financial overview

* Delta in percentage for ratios (% indicators) is calculated as a difference between the ratio in the current reporting period and the ratio in the previous reporting period

Q1 2011 Consolidated Financial Results

Revenue increased by 23% to US$ 247 million (Q1 2010: US$ 200 million) mostly as a result of higher chicken prices and higher sunflower oil prices.

EBITDA increased by 15% to US$ 57 million (Q1 2010: US$ 49 million) compared to the same period last year, but due to increase in sales as a result of higher sunflower oil prices EBITDA margin decreased slightly to 23% (Q1 2010: 25%).

Net income from continuing operations decreased to US$ 20 million (Q1 2010: US$ 36 million) due to the net effect of non-cash foreign exchange losses/gains of US$ 18 million (US$ 6 million foreign exchange losses in Q1 2011 versus US$ 12 million foreign exchange gains in Q1 2010).

Poultry and related operations

Q1 2011 Poultry and related operations segment financial results

In Q1 2011, chicken meat sales volumes to the third parties on an adjusted-weight basis increased by 2% to 84,300 tonnes (Q1 2010: 83,000 tonnes) as a result of increased volumes due to more effective usage of existing capacity.

The average chicken meat sales price increased by almost 4% to UAH 12.83 per kg compared to Q1 2010 (UAH 12.38 per kg). Average sunflower oil prices increased by 54% to US$ 1,306 per tonne from US$ 850 per tonne in Q1 2010, in line with world pricing trends.

As a result, the segment revenue increased by 18% to US$ 209 million (Q1 2010: US$ 177 million).

Poultry production costs in Q1 2011 rose slightly in UAH terms compared to Q1 2010 due to the increase in grain and utility prices, which was partially compensated by the reduced cost of hatching eggs. Since H2 2010, the Company has been self-sufficient in hatching eggs; in Q1 2010 approximately 25% of hatching eggs had to be imported at extra expense.

Gross profit in the poultry segment increased by 19% from US$ 44 million in Q1 2010 to US$ 53 million in Q1 2011, whilst the gross profit margin remained stable at 25%.

Segment EBITDA in Q1 2011 increased by 12% to US$ 57 million (Q1 2010: US$ 51 million). EBITDA per 1 kg of chicken meat increased by 10%, whilst EBITDA margin in poultry segment in Q1 2011 slightly decreased (27% compared to 29% in Q1 2010), due to the increase of sunflower oil sales as a share in total poultry segment sales as sunflower oil prices increased by 50%. In accordance with the Group's intra-divisional accounting policy, the sunflower oil gross margin is zero.

Grain growing operations

Revenue in MHP's grain growing segment in Q1 2011 is generated by the sale of grain stocks, mainly wheat, that have already been revalued to market prices in 2010. Due to the harvest cycle, there is a significant seasonality in this division and revenue is second half weighted.

In 2011 MHP expects to harvest by 60% more land (additional 100,000 hectares) compared to 2010 in its grain growing, which will significantly increase the volumes available for external sale.

Other agricultural operations

Revenue from Other Agricultural Operations in Q1 2011 was US$ 32 million (Q1 2010: US$ 21 million) a 52% increase year-on-year following further increase in sausage and cooked meat production volumes by 27% to 7,900 tonnes compared to Q1 2010.

Average sausage and cooked meat prices during Q1 2011 increased by 7% to UAH 18.22 per kg excluding VAT compared to Q1 2010.

Divisional gross profit was US$ 3 million in Q1 2011 (Q1 2010: US$ 2 million). Divisional EBITDA increased to US$ 4 million (Q1 2010: US$ 2 million) and EBITDA margin slightly increased to 12% (Q1 2010: 11%).

Current Group financial position, cash flow and liquidity

In Q1 2011, cash flow from operations before working capital changes was US$ 63 million (Q1 2010: US$ 48) in line with EBITDA growth.

The total increase in working capital was US$ 26 million. The main contributors to the change in working capital were the same as in Q1 2010, being the cost of the annual grain sowing campaign in the grain, which have increased this year due to the expanded area of cultivation.

Total CAPEX in Q1 2011 of US$ 57 million was mostly related to the capital intensive Vinnytsia project. Since the start of construction in May 2010, approximately US$ 150 million has been invested on this project.

Vinnytsia - new green field project

Construction work on the Vinnystia project, which commenced as announced previously in May 2010, is running to schedule and on budget. Significant progress has already been made with poultry farm, fodder complex and infrastructure at the Vinnytsia site. All equipment required for Phase 1 is already contracted and is being dispatched now.

Poultry Farm

·; Construction of the hatchery is 60% complete

·; 2 brigades (chicken rearing zones) with 38 chicken houses in each is 55% complete

·; Construction of the slaughter house for Phase 1 (220,000 tonnes of poultry per annum) is 55% complete

We will start installation of the equipment in September 2011.

Fodder Plant and Grain Storage Facilities

·; Construction of the sunflower seeds silo (200,000 m3) is 95% complete, installation of the equipment is 45% complete

·; Construction of the grain silo (200,000 m3) is 88% complete, installation of the equipment is 45% complete

·; Construction of Fodder Plant and Sunflower Crushing Plant has just started

Infrastructure and Social

Construction of two independent electric power substations is by 95% complete. In addition, as part of the facility, MHP will be constructing 45km of new roads (over 50% complete), 200 new residential apartments, a hostel with a capacity for 800 people and a kindergarten with a capacity for 260 children.

MHP has set up a section on its website dedicated to Project Vinnystia where regular updates will be provided, as well as photographs documenting each stage of the project. Please visit http://www.mhp.com.ua/en/node/1082/ for further information.

Debt Structure

As of the period end, the Company's total debt was US$ 805 million with an average weighted cost of debt below 10%. About 70% of total debt is the Eurobond that matures in April 2015. The Company's total debt is mainly denominated in US dollars.

At the end of Q1 2011, MHP had US$118 million in cash and short term bank deposits.

The Net Debt/EBITDA ratio at the end of the period was 2.07 (Eurobond covenant: 2.5).

As a hedge for currency risks, revenue from the export of sunflower oil, sunflower husks and chicken meat are denominated in US Dollars, fully covering debt service expenses.

Outlook

This yearthe Company expects to harvest from 60% more land (an additional 100,000 hectares) compared to 2010. This will lead to a significant increase in our grain production capacity and external sales volumes and profitability for the current year.

Consumer demand for poultry meat continues to remain high and the Company expects that the average chicken meat sales prices through the year to be higher than the 2010 average.

We are continuing to increase the quantity of sausages and cooked meat that we produce, whilst also producing a wider range of value-added products at our meat processing plants. Due to the investments made in 2010, the Company increased its meat-processing capacities at the Ukrainian Bacon facility and will receive production benefits during 2011

The CAPEX program in 2011 is mostly related to construction and beginning of equipment installation on the new Vinnitsa poultry production complex, where the construction is on schedule.

We are confident that we will be able to continue to implement our strategy and keep on delivering strong financial results cementing our position as one of the leading agro-industrial companies in Ukraine and the region.

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Notes to Editors:

About MHP

MHP is the leading producer of poultry products in Ukraine with the greatest market share and highest brand recognition for its products. MHP owns and operates each of the key stages of chicken production processes, from feed grains and fodder production to egg hatching and grow out to processing, marketing, distribution and sales (including through MHP's franchise outlets). Vertical integration reduces MHP's dependence on suppliers and its exposure to increases in raw material prices. In addition to cost efficiency, vertical integration also allows MHP to maintain strict biosecurity and to control the quality of its inputs and the resulting quality and consistency of its products through to the point of sale. To support its sales, MHP maintains a distribution network consisting of 11 distribution and logistical centres, within major Ukrainian cities. MHP uses its trucks for the distribution of its products, which Management believes reduces overall transportation costs and delivery times. MHP also has a leading grain cultivation business growing corn to support the vertical integration of its chicken production and increasingly other grains, such as wheat and rape, for sale to third parties. MHP leases agricultural land located primarily in the highly fertile black soil regions of Ukraine.

Since May 15, 2008, MHP has traded on the London Stock Exchange under the ticker symbol MHPC.

Forward-Looking Statements

This press release might contain forward-looking statements that refer to future events or forecast financial indicators for MHP S.A. Such statements do not guarantee that these are actions to be taken by MHP S.A. in the future, and estimates can be inaccurate and uncertain. Actual final indicators and results can considerably differ from those declared in any forward-looking statements. MHP S.A. does not intend to change these statements to reflect actual results.

MHP S.A.

AND ITS SUBSIDIARIES

Condensed Consolidated Interim Financial Statements

For the three months

ended 31 March 2011

MHP S.A. AND ITS SUBSIDIARIES

Page

On behalf of the Board

The notes on pages 7 to 16 form an integral part of these condensed consolidated financial statements.

On behalf of the Board

The notes on pages 7 to 16 form an integral part of these condensed consolidated financial statements.

On behalf of the Board

The notes on pages 7 to 16 form an integral part of these condensed consolidated financial statements. 

The notes on pages 7 to 16 form an integral part of these condensed consolidated financial statements.

On behalf of the Board

The notes on pages 7 to 16 form an integral part of these condensed consolidated financial statements.

MHP S.A. AND ITS SUBSIDIARIES

CONDENSED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED 31 MARCH 2011

1. DESCRIPTION OF THE BUSINESS

MHP S.A. (the "Parent" or "MHP S.A."), a limited liability company registered under the laws of Luxembourg, was formed on 30 May 2006. MHP S.A. was formed to serve as the ultimate holding company of OJSC "Myronivsky Hliboproduct" ("MHP") and its subsidiaries. Hereinafter, MHP S.A. and its subsidiaries are referred to as the "MHP S.A. Group" or the "Group". The registered address of MHP S.A. is 5, rue Guillaume Kroll, L-1822 Luxembourg.

The principal business activities of the Group are poultry and related operations, grain growing, as well as other agricultural operations (meat processing, cultivation and selling fruits and producing beef and meat products ready for consumption).The Group's poultry and related operations integrate all functions related to the production of chicken, including hatching, fodder manufacturing, raising chickens to marketable age ("grow-out"), processing and marketing of branded chilled products and include the production and sale of chicken products, sunflower oil, mixed fodder and convenience food products. Grain growing comprises the production and sale of grains. Other agricultural operations comprise the production and sale of cooked meat, sausages, beef, milk, goose meat, foie gras, fruits and feed grains. During the three months ended 31 March 2011, the Group employed over 22,000 people.

During the year ended 31 December 2010 the Group substantially increased its agricultural land bank as part of its vertical integration and diversification strategy through acquisitions of land lease rights.

During the year ended 31 December 2010 the Group also commenced construction of the greenfield Vinnytsya poultry complex.

The Group's operational facilities are located in different regions of Ukraine, including Kyiv, Cherkasy, Dnipropetrovsk, Donetsk, Ivano-Frankivsk, Vinnytsya, Kherson, Sumy, Khmelnitsk regions and Autonomous Republic of Crimea.

The primary subsidiaries and the principal activities of the companies forming the Group as of 31 March 2011 and 31 December 2010 were as follows:

·; Effective voting rights in subsidiaries did not differ from effective ownership rights. Direct ownership interest in subsidiaries by the Parent differs from the effective ownership interest due to cross holdings between subsidiaries.

2. BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The condensed consolidated interim financial statements are prepared on the basis of accounting policies as set forth in the Group's consolidated financial statements as at and for the year ended 31 December 2010. Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with International Financial Reporting Standards ("IFRS") have been condensed or omitted. However, such information reflects all adjustments (consisting of normal recurring adjustments), which are, in the opinion of the Group management, necessary to fairly state the results of interim periods. Interim results are not necessarily indicative of results to be expected for the full year. The 31 December 2010 balance sheet was derived from the audited consolidated financial statements.

The functional currency of the Group is the Ukrainian Hryvnia ("UAH"). Transactions in currencies other than the functional currency of the Group are treated as transactions in foreign currencies. Such transactions are initially recorded at the rates of exchange ruling on the dates of the transactions. Monetary assets and liabilities denominated in such currencies are translated at the rates prevailing on the statement of financial position date. All realized and unrealized gains and losses arising on exchange differences are included in the consolidated statement of comprehensive income for the period.

These consolidated financial statements are presented in US Dollars ("USD"), which is the Group's presentation currency.

The results and financial position of the Group are translated into the presentation currency using the following procedures:

·; Assets and liabilities for each statement of financial position presented are translated at the closing rate as of the date of that statement of financial position;

·; Income and expenses for each statement of comprehensive income are translated at exchange rates at the dates of the transactions;

·; All resulting exchange differences are recognized as a separate component of equity.

The following exchange rates were used:

3. PROPERTY, PLANT AND EQUIPMENT, NET AND OTHER NON-CURRENT ASSETS

During the three months ended 31 March 2011, the Group continues investment into its poultry and grain growing operations. Capital expenditure of poultry business segment mostly comprised of construction works related to Vinnytsya poultry complex.

During the three months ended 31 March 2011, the Group's additions to property, plant and equipment amounted to USD 55,296 thousand.

There have been no significant disposals of property, plant and equipment during the three months ended 31 March 2011.

4. RELATED PARTY BALANCES AND TRANSACTIONS

For the purposes of these financial statements, parties are considered to be related if one party controls, is controlled by, or is under common control with the other party, or exercises significant influence over the other party in making financial or operational decisions. In considering each possible related party relationship, attention is directed to the substance of the relationship, not merely the legal form.

Related parties may enter into transactions which unrelated parties might not, and transactions between related parties may not be effected on the same terms and conditions as transactions between unrelated parties.

Transactions with related parties under common control - The Group enters into transactions with related parties in the ordinary course of business for the purchase and sale of goods and services and in relation to the provision of financing arrangements.

The terms and conditions of sales to related parties are determined based on arrangements, specific to each contract or transaction. Management believes that the accounts receivable due from related parties do not require allowance for irrecoverable amounts and that the amounts payable to related parties will be settled at cost. The terms of the payables and receivables related to trading activities of the Group do not vary significantly from the terms of similar transactions with third parties.

The transactions with the related parties during the three months ended 31 March 2011 and 31 March 2010 were as follows:

During the three months ended 31 March 2011 the Group's sales to related parties mainly consisted of sales of poultry production related products.

The balances owed to and due from related parties were as follows as of 31 March 2011 and 31 December 2010:

Compensation to key management personnel

Total compensation of the Group's key management personnel (including compensation to Mr. Yuriy Kosyuk), which consist of contractual salary and performance bonuses amounted to USD 1,918 thousand and USD 2,289  thousand for the three months ended 31 March 2011 and 2010, respectively.

5. CHANGES IN INVENTORIES AND AGRICULTURAL PRODUCE

Increase of inventories during the three months ended 31 March 2011 resulted mainly from accumulation of stocks of raw materials by grain growing entities.

Agricultural produce balances have decreased as of 31 March 2011 compared to 31 December 2010 mainly due to the internal consumption of corn and sunflower seeds.

6. CURRENT BIOLOGICAL ASSETS

Increase of current biological assets balances during the three months ended 31 March 2011 is primarily attributable to crops balances. The increase refers to the costs incurred with respect to future harvest, reflecting seasonality element inherent in the grain growing segment.

7. TRADE ACCOUNTS RECEIVABLE, NET

The balances of trade accounts receivable were as follows as of 31 March 2011 and 31 December 2010: 

8. BANK BORROWINGS

The following table summarizes bank loans and credit lines held by the Group as of 31 March 2011 and 31 December 2010: 

The following table summarizes bank loans and credit lines with respect to the type of interests charged held by the Group as of 31 March 2011 and 31 December 2010:

Bank loans and credit lines as of 31 March 2011 were repayable as follows: