MHP’s H1 2025: higher sales, lower margins, and a strategic leap into Spain
MHP SE has posted a resilient set of interim results in the thick of a very tough operating backdrop. Revenue rose 10% year-on-year to US$ 1,635 million for the six months to 30 June 2025, helped by firmer poultry prices and steady exports. Profitability, however, tightened as war-related costs and weak vegetable oil margins bit into earnings. The big strategic development lands just after period end: the acquisition of more than 92% of Spain’s Grupo UVESA for EUR 271 million, giving MHP a significant foothold in the EU’s poultry market.
Before diving in, a quick jargon check:
- Adjusted EBITDA: earnings before interest, tax, depreciation and amortisation, adjusted for non-core items (here shown net of IFRS 16 lease effects).
- LTM: last twelve months.
- Net debt: total borrowings less cash and equivalents.
Headlines investors should care about
| Metric | H1 2025 | H1 2024 | Change |
|---|---|---|---|
| Revenue | US$ 1,635 million | US$ 1,489 million | +10% |
| Operating profit | US$ 136 million | US$ 192 million | -29% |
| Adjusted EBITDA (net of IFRS 16) | US$ 236 million (14% margin) | US$ 264 million (18% margin) | -11% |
| Net profit | US$ 75 million | US$ 45 million | +67% |
| Net cash from operating activities | US$ 162 million | US$ 143 million | +13% |
Q2 on its own looked similar: revenue up 11% to US$ 856 million; adjusted EBITDA at US$ 125 million (down 14%); and net profit of US$ 43 million, up from US$ 29 million.
What’s driving the mix: chicken up, oil down
Poultry and processed meat buoyed by price
Despite lower volumes in Ukraine, poultry and processed meat delivered the growth. Segment revenue rose 14% to US$ 897 million, and adjusted EBITDA edged up 6% to US$ 166 million with a solid 19% margin (20% a year ago).
- Ukraine poultry production: 341,940 tonnes (down 7%).
- Average Ukraine poultry price: US$ 2.29/kg (up 16%); in Q2: US$ 2.41/kg (up 22%).
- Exports from Ukraine: 185,589 tonnes (flat year-on-year).
- Perutnina Ptuj (Europe) volumes: 73,118 tonnes (up 5%), with average prices EUR 3.62/kg (up 4%).
Takeaway: MHP managed to pass through higher prices and keep export channels open, even as the War disrupted operations and capped volumes.
Vegetable oils: margin squeeze
This was the weak spot. Vegetable oil revenue fell 5% to US$ 224 million and adjusted EBITDA tumbled 78% to just US$ 6 million, with margins sliding to 3% (11% last year). Management points squarely to elevated oilseed prices compressing margins.
European segment holding its own
The European operating segment posted 15% revenue growth to US$ 322 million, with adjusted EBITDA stable at US$ 49 million (margin 15% vs 17% prior). It’s growing, but not yet offsetting the vegetable oil drag.
Costs, currency and the War: why margins fell but net profit rose
Operating profit fell 29% to US$ 136 million, reflecting lower gross profit from oils, higher payroll in SG&A, and increased war-related costs booked in other operating expenses. MHP quantified War-related costs at US$ 31.8 million in H1 2025 (US$ 26.0 million in H1 2024), including support donations, salaries to mobilised employees, and write-offs of damaged inventories and biological assets.
So how did net profit still rise to US$ 75 million? Currency. The Ukrainian hryvnia was relatively stable, producing a net foreign exchange gain of US$ 14 million in H1 2025 versus a US$ 81 million loss last year. That swing more than bridged the EBITDA decline at the bottom line.
Cash, debt and the 2026 bond wall
Cash generation improved modestly: operating cash flow was US$ 162 million (US$ 143 million), against investing cash outflows of US$ 179 million and financing outflows of US$ 20 million, for an overall cash decrease of US$ 37 million in the half.
| Debt and liquidity | 30 Jun 2025 | 31 Dec 2024 |
|---|---|---|
| Net Debt | US$ 1,243 million | US$ 1,179 million |
| LTM adjusted EBITDA (net of IFRS 16) | US$ 540 million | US$ 566 million |
| Net Debt / LTM adjusted EBITDA | 2.30x | 2.08x |
The leverage ratio at 2.30x is well below the 3.0x Eurobond limit. Note the maturity profile: the 6.95% Senior Notes due 2026 (carrying amount US$ 548 million) are now classified as current, with the 6.25% Notes due 2029 at US$ 349 million non-current. Management stresses a “prudent debt management strategy” and a strong repayment track record. The auditor drew attention to a material uncertainty related to going concern given the War, but did not modify its conclusion.
UVESA acquisition: what it adds and why it matters
On 31 July 2025, MHP completed the purchase of over 92% of Grupo UVESA for EUR 271 million (about US$ 312 million). UVESA is a vertically integrated producer of poultry, pork and feed in Spain, operating a large base of integrated farms and serving major retailers and wholesalers. Purchase price allocation is not yet finalised.
Why this is strategically meaningful:
- Geographic diversification – reduces concentration risk in Ukraine during wartime.
- EU market access at scale – UVESA brings a stable Spanish customer base.
- Synergies over time – operational alignment, efficiency investment and product innovation are planned, plus potential export strength into European and Middle Eastern markets.
In short: UVESA gives MHP another strong platform in the EU alongside Perutnina Ptuj. Execution on integration and margins will be the next test.
Other moving parts to watch
- EU trade terms: the EU’s Autonomous Trade Measures expired on 5 June 2025, reinstating tariffs and quotas. Management is “actively monitoring” the impact. This could temper export economics into the EU if not mitigated.
- Dividend stance: none declared for 2024 and no interim dividend for H1 2025, reflecting the need to preserve liquidity.
- Capex and bioenergy: US$ 134 million spent on property, plant and equipment in H1, with ongoing modernisation and bioenergy projects.
- Acquisition of Ukrainskyi Miasnyi Khutir: completed in January 2025 for US$ 15.6 million, adding further depth in processed meat brands.
My take: balanced progress under pressure
There’s plenty to like: revenue growth, strong poultry pricing, stable exports, and disciplined leverage at 2.30x with headroom to covenants. The UVESA deal is a bold, strategically sensible move that could reshape the group’s geographic risk profile and long-term growth trajectory.
On the flip side, margins are clearly under pressure – vegetable oil earnings were the biggest drag – and War-related costs remain elevated. The going concern emphasis underscores that Ukraine risk isn’t going away, and the US$ 550 million bond due in April 2026 requires continuous, careful funding management.
Net result: a cautiously positive set of numbers with credible strategic momentum. If MHP executes integration well, nurtures European margins, and keeps the 2026 refinancing path clear, today’s compressed group margin could mark the low point. The immediate watchlist for investors includes UVESA integration milestones, oilseed price dynamics, EU market access post-ATMs, and any updates on the 2026 notes.
