Pre-close trading update for Q2 and H1 2013

PRESS RELEASE

July 16, 2013, Kyiv, Ukraine

MHP S.A.Pre-close trading update for the second quarter and first half of 2013

MHP S.A. (LSE: MHPC) ("MHP" or "The Company"), one of the leading agro-industrial companies in Ukraine, focusing on the production of poultry and the cultivation of grain, today announces its pre-close trading update for the second quarter and the first six months of the year ending 30 June 2013.

Poultry and Poultry Related Operations

During the first half of 2013 MHP's poultry production facilities worked at full capacity utilization. At the same time, during the reporting period all production sites at the Vinnytsia complex have been gradually increasing its production volumes. Currently, 7 chicken rearing sites (out of 12) are in operations.

Owing to the increasing production volumes at the Vinnytsia poultry farm, poultry production volumes in Q2 2013 increased by 21% to 121,170 tonnes (Q2 2012: 99,920 tonnes) and in H1 2013 increased by 18% to 190,180 tonnes (H1 2012: 224,590 tonnes).

As a result of an overall increase in poultry production volumes during the second quarter of 2013, the sales volume of chicken meat to external consumers constituted 113,580 tonnes, which is 18% higher than in Q2 2012. During the first six months of 2013 third parties sales amounted 205,300 tonnes of poultry, which is 13% higher than in H1 2012.

Export Sales: Implementing the Company's strategy of export sales growth, during the second quarter of 2013 the volume of chicken meat export tripled the volumes of Q2 2012 and reached 31,550 tonnes, steering the trend of export sales in Q1 2013. During the first half of 2013, poultry export sales increased by almost 3 times and reached 54,750 tonnes. MHP continues to explore new business opportunities in the countries of Asia, Middle East and Africa building-up the export volumes of chicken meat in those regions.

Prices: Through the second quarter of 2013the average chicken meat price (both domestic and export) remained stable compared to Q1 2013, however decreased by 7% to UAH 16.20 per 1 kg of adjusted weight (excluding VAT) compared to Q2 2012. H1 2013 average chicken meat price constituted UAH 16.26 and was 5% lower than in H1 2012. The decrease in poultry prices is mostly related to the increased share of export in total poultry sales of the Company (as a result of lower price for frozen chicken (export) compared to the fresh).

Due to the increase of the production of fodder meal at the Vinnytsia complex in Q2 2013, MHP sold 61,850 tonnes of sunflower oil, which was 26% higher than in Q2 2012, mainly for export. The average price of US$1,097 per tonne in Q2 2013 was 3% lower than in Q2 2012 (US$1,131 per tonne) in line with world market trends. In H1 2013, 111,160 tonnes of sunflower oil, which was 17% higher than in H1 2012, were sold at an average price of US$ 1,120 per tonne, which was 1% higher in price compared to H1 2012 (US$ 1,109 per tonne). 

Grain Growing Operations

During the period, the Company has been gradually increasing its land bank. As a result of several acquisitions, around 35,000 hectares of land in Ukraine and 40,000 hectares of land in Russia were added to MHP grain growing assets (285,000 hectares as of 31 December 2012). Currently, the Company cultivates around 360,000 hectares of land in total.

In 2013 in grain growing operations the Company is to harvest around 290,000 hectares of land in Ukraine and 40,000 hectares of land of newly acquired asset in Russia as well as to cultivate around 30,000 hectares of land in other agricultural operations.

Due to the favorable weather conditions in Ukraine, operational efficiency and employment of best practice, we expect our yields across all crops to be good, stronger than last year and significantly higher than Ukraine's average.

The Company started harvesting wheat, rapeseeds and barley with a current yield higher than in 2012.

Other Agricultural Operations

In the second quarter of 2013, sausage and cooked meat sales volumes slightly decreased by 3% to 8,770 tonnes compared to 9,010 tonnes in the second quarter of 2012. In the first half of 2013 sausage and cooked meat sales volumes decreased by 2% to 16,110 tonnes compared to 16,510 tonnes in H1 2012.

Average sausage and cooked meat prices during the second quarter of 2013 increased by 5% to UAH 23.14 per kg excluding VAT (Q2 2012: UAH 22.07 per kg). In H1 2013 average prices increased by 5% from UAH 21.83 per kg excluding VAT to UAH 22.86 per kg excluding VAT.

MHP continues to lead the market of meat processing products, by using internally produced chicken meat, enhancing its profitability in meat processing business segment.

Next release: The financial results for Q2 and H1 2013 will be published on August 29, 2013. There will be a conference call for investors and analysts on the day that will take place at 4pm Kyiv time (2 pm London/5 pm Moscow). Dialing instructions for the call will be published in a due course.

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Notes to Editors:

About MHP

MHP was admitted to the Official List of the London Stock Exchange in May 2008. It is the leading producer of poultry products in Ukraine, with a 2012 market share for industrially produced chicken meat of approximately 50%, according to the State Committee on Statistics of Ukraine. It's "Nasha Ryaba" brand is the market leader with 95% of brand recognition, whilst MHP also has several other national and regional brands for processed meat products.

MHP is fully vertically integrated owning and operating 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 bio-security and to control the quality of its inputs and the resulting quality and consistency of its products through to the point of sale.

MHP also has an important and expanding grain operation, producing and selling sunflower oil as a by-product of its fodder production. MHP also produces and sells sausages, cooked meats convenience food products, goose meat, foie gras, beef and fruit.