MHP (MHPC) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue rose 8% year-over-year to $779 million, with growth across all segments despite ongoing war-related disruptions in Ukraine.

• Net profit doubled to $32 million from $16 million in Q1 2024, mainly due to foreign exchange gains and margin stabilization.

• Operating profit declined 29% year-over-year to $60 million, reflecting lower gross profit and higher war-related and payroll expenses.

• The company is expanding in Europe, including the acquisition of Spain's UVESA Group for $270 million, pending regulatory approvals.

• No dividends declared for 2024 or Q1 2025 due to ongoing uncertainties and liquidity preservation.

Financial highlights

• Adjusted EBITDA (net of IFRS 16) for Q1 2025 was $111 million, a 7% year-on-year decrease, with margin down to 14%.

• Gross profit declined 4% year-over-year to $163 million, mainly due to weaker poultry and vegetable oil margins.

• Cash flow from operations before working capital changes increased to $101 million from $90 million in Q1 2024.

• Total CAPEX in Q1 was $60 million, focused on maintenance, modernization, and expansion projects.

• Net cash from operating activities was $45 million, down from $102 million in Q1 2024.

Outlook and guidance

• The company expects continued inflationary pressure on production inputs and rising grain prices, which may further impact costs.

• The vegetable oil segment is expected to deliver low profitability in 2025 due to high input costs and low oil prices.

• Export volumes to the EU are expected to decrease in 2025 due to anticipated trade quotas and expiration of EU Autonomous Trade Measures.

• Working capital normalization expected in Q2 2025 after a temporary increase in receivables.

• Management expects future results may be adversely affected by war-related challenges outside their control.