MHP SE

Good afternoon, everyone, and welcome to the MHP fourth quarter and four-year results 2021. I will now hand over to Anastasia to make the introduction.

Dear shareholders and stakeholders, good afternoon and good morning. Thank you for joining us today for MHP's conference call. This is Anastasia Sobotyuk, Director of Investor Relations and International Communications. On the call today, together with Victoria Kapelushnaya, CFO of MHP, we will discuss MHP financial and operational results for 2021 in general and by segments, as well as current operational environment and expectations for 2022, taking into account that Ukraine is now at war with Russia. Today's call is based on information released earlier today publicly However, during our call, we will discuss our projections and plans based on our assumptions, domestic and international trends. Please take it into consideration. After the presentation, we will be glad to answer all your questions. So let's start. We go on slide number four of the presentation. So we have a different start of the presentation of the results today because Ukraine is at war. The military invasion of Ukraine by Russia forces began at 5 a.m. on 24th of February, marking the beginning of a full-scale war across Ukraine. Since the beginning of the war, the company has been facing significant logistical and infrastructure challenges in Ukraine. While MHP has been able to continue commercial sales in Ukraine since the war began, export sales ceased as a result of port being closed, while export delivery by trucks remains practically impossible. During March and April, MHP team has been developing alternative logistic routes for exports, enabling yet a limited volumes to be delivered outside of Ukraine. Because of the restricted sales both inside and outside the country, MHP has to decrease poultry capacity utilization to 80 to 85%. Due to food storage shelling by the Russian forces in March, MHP lost over 3,000 tons of poultry products, which is over 6 million in U.S. doll tons. The facility was Ukraine's largest warehouse for storage of frozen products and was predominantly used by large local retail chains. As hostilities in the Donetsk region intensified, in April MHP decided to temporarily suspend operations of Ukrainian people. And of course, we took care, proper care of our people. We managed to relocate them. Despite different challenges, MHP is on the way to complete this year's sewing campaign. MHP has a key responsibility in the food security of Ukraine. MHP has continued its operation despite significant difficulties and disruptions. MHP fully understands how important poultry production is for Ukraine. and its population at this difficult time. All MHP employees are fully committed to every effort to ensure that Ukrainians have access to food now and in future. Since the war began, the company has provided around 11,000 tons of free of charge poultry products, other food, equipment, cars, diesel, and different materials as part of its humanitarian mission. I think we are ready to come back to the company's results now. And we go together on slide number six of the presentation. We start with operational updates. Despite all challenges at the beginning of 2021, avian influenza and temporarily export bans because of that, the group delivered an exceptional performance in 2021, driven by a combination of excellent weather conditions, which resulted in a record harvest and strong prices for grains and poultry products. Poultry production increased by 3% to around 754,000 tons of chicken meat, while sales remained stable. 221 harvest was one of the MHP's record harvest with over 2.6 million tons of crops, and these crops are being used mainly internally for quarter production and, of course, traditionally for exports. Financial results for the year look as follows. Revenue increased by 24% to over 2.3 billion U.S. dollars, with export revenue representing 53% of total revenue, mainly driven by an increase in exports of poultry meat. Adjustability increased by 91%, and reached 648 million US dollars, driven mainly by excellent results in grain growing operations. As a result of substantial EBITDA growth, NASDAQ to LTM EBITDA ratio instituted below two times. Let's go on slide number seven of the presentation. Key financials for the fourth quarter and full year here. MHP's revenue and export revenue have been gradually growing quarter by quarter, as you can see on the chart on the left, driven by positive results across all business segments. Revenue in the fourth quarter of 2021 increased by 46% year-on-year to $725 million in a quarter, while export revenue increased by 34% to around $422 million, mainly driven by strong exports, of poultry and grains. Annual results in net profit was $353 million, which was almost five times more than net profit in 2020. Let's go on to the next slide. Slide number eight of the presentation, which shows us the financial results by segment. The vast majority of the revenue in 2021 traditionally was generated by poultry and related operation segment, 68%, and by 13 October, by the European operation segment, which is 17%. At the same time, grain growing and poultry operations contributed the most to the company's EBITDA. That was 52% and 41% respectively. The biggest contributor to the output revenue was from pulp reparations, and that constituted almost one billion US dollars. Let's have a closer look at each business segment and results on our next slide. And here I present my word to Gloria.

Thank you, Anastasia. Good afternoon, everyone. Let's have a look at MHP Ukraine poultry segment performance, slide number nine. It is important to highlight that during 2021, all MHP poultry production facilities in Ukraine have been operated at full capacity, despite different challenges at the beginning of the year, as an influenza outbreak and coronavirus. As you can see, MHP delivered exceptional strong results last year compared to the previous year, driven mainly by strong poultry price, both in Ukraine and internationally. Total revenue in poultry segment increased by 24% year-on-year, driven mostly by increase in poultry prices. Experts driven by price growth for chicken breast and fillet in EU and quarters and small chicken in MENA region. In Ukraine, gradually compensating a substantial increase in poultry production costs and reaching the same level of profitability as in pre-COVID-19 times. Poultry production costs last year increased by 28% in the world, driven by significant growth of grain protein price. Quarter-on-quarter poultry costs also increased, mainly reflected higher cost of sunflower, soybean cake and fodder. As well, it's increasing price for energy, especially mainly for gas and packaging materials. Let's move to the next slide, number 10. Our grain growing segment has performed exceptionally and historically strong results. EBITDA last year amounts almost $400 million compared to the $150 million last year driven mainly by impressive strong harvest of winter crops. over 20% higher year-on-year, and spring crops over 60% year-on-year, as well as very strong international grain prices, around 40% increase year-on-year. EVDA projections last year reached amount of $1,000, which is a record result in MHP history. Let's process onto the slide number 11. Meat processing business, following a strategy of culinary transformation of the company, has a positive trend in volume and price, mainly due to increased sales of more expensive SKU and expansion of cooperation with large horticulture channels with more marginal product sales increased. Adjusted TBDA of this segment decreased, driven mainly by increase in raw material price, which has not yet been offset by increase in price of meat processing product. Let's go to the slide number 12. Several words about . Growth incapacity in Serbia and Croatia results in 16% increase in poultry sales year-on-year, which resulted in a BDA growth of 20% year-on-year, Moreover, the significant EBITDA growth is attributable to high operation efficiency, which allows to offset growing cost of raw materials, positive impact from appreciation of euro against dollar, as well as one of effects related to insurance and some changes in accounting treatment, but very insignificant amount, around 1.5 million euros. Let's go to slide number 13, a few words about our cash flow and liquidity position. Cash from operations increased mainly in line with increase of EBITDA and additional impact was due to the change in fair value of biological assets and agricultural produce, which represents non-cash adjustment. Use of funds in working capital during 2021 was mostly related to high investment in stocks of corn designed for internal use mainly and pulling the high yield last year and significantly high our investment in sowing in sunflower seeds as well as increasing price on sunflower seeds. Sunflower seeds and soil seeds. Total capex last year amounted $140 million, mainly related to requirements in maintenance, established state-of-the-art culinary centers in Kiev, improving and expansion in Perutnina production facility, and modernization and cost optimization projects, as well as development of new culinary products. Regarding debt, Due to significant improvement in EBITDA, we substantially improved leverage net debt to EBITDA and ratio was 1.9 versus Eurobond Covenant limit 3. At the end of the period, MHP total debt was 1.5 billion and net debt about 1.2 billion dollars. 99% of total our debt was long-term debt, about 96% of which Eurobonds. Our average rate interest rate was 6.7%. In terms of liquidity, at the end of December, we had around $275 million in cash. Our currency balance remains strongly positive and our dollar-determinated export revenue fully covers all our debt service and other payments in foreign currency. And now I give the floor to Anastasia for the update and outlook.

Thank you very much, Victoria. So we all see that the company's performance in 2021 was very strong. but times are different now. And of course, we remain strong and united, the whole team. We continue to operate with maximum devotion and responsibility because we all know that Ukraine's food security depends on our work, making this important task our number one priority. MHPS business model practically gives us an additional value or an advantage In plain term, we convert grain into chicken and logistically that simplifies the work of the business. So we are now working on output logistics with the targets to increase volumes of poultry meat. I have to say that it is still very challenging, frankly. MHP hopes to harvest grain crops from around 95% of our land. where we are currently, as I mentioned previously, having spring sowing campaign. It is in progress. MHP is expecting shortly to recommend production and export of vegetable oil, but there remains extreme uncertainty about how the war in Ukraine will progress and the effects this could have on MHP's operations over the coming months. And as a result, and in spite of the group's success in maintaining operations thus far, at this stage, as we all understand, it is not possible to provide guidance as to how the year may turn out. I think I can finish our presentation here. And I would like to thank you very much. And of course, we are ready to take your questions. And operator, Tim?

Yes, thank you very much. We will now proceed to the Q&A. So just a reminder, if you have a question, please press star two if you're dialed in by the phone. If you're dialed in by web, please type your question in the box provided or click the button to ask a voice question. So we'll just give it a moment or two for the questions to come in. OK, so our first question comes from Danielle Vachkovich from Barclays. Caller, please go ahead.

Hello. Thank you very much for the call, particularly under the difficult circumstances. So just with regard to the logistical challenges that you're facing exporting because of the blockade of Black Sea. So you've been trying to export more by road. What are the main challenges that you face increasing exports by road and rail? Is it mainly Availability of drivers and trucks, or are there other complications? Separately, could I ask about how you've been managing your cash flow? Obviously, there was the coupon grace period extension, but you're still facing working capital challenges in terms of customer payment, and also what approach have you been taking towards CapEx? Thanks.

Thank you for your question. Yeah, I will. Yes, I will start to ask. Yeah, about our logistic problems. Yeah, you understand that we export, as Anastasia mentioned, that today we export meat and sunflower, try to export sunflower and soil oil. And in previous last year, for example, only 30% of total our export of meat was export to you. The 70% is the exports through seaports. And we have a lot of problems, first of all, because quantity of trucks, which they are ready to go to, quantity of trucks, it is a big problem. Because, for example, last year for us it will be enough around 300 trucks. Today, we need to have completely other figures. What we have today is a huge view on customs, on border, because, for example, just one month ago, trucks from our factory go to Europe and come back to factory. It was around one week. Today, more than two weeks. This problem. Maybe this is the biggest problem. The quantity of drugs and the period of time which is just for one way. Regarding your question about working capital, our investment is completely right. Because today, and it is not just, because today, for example, our delivering and time for delivering from our factory to KCR, it was at minimum 50 days. Previously, it was approximately 20 days, delivering to our clients. And regarding even, for example, and that is why we need to invest more more money in working capital, in trade receivables, and in stocks. And generally, we have now, we have in Ukraine, and just in Ukraine, and outside in Ukraine, we have mostly, not inside, mostly on the way, we have huge stock of chickens. Today the figure is around 50,000, significantly higher than previous. Hello? Yeah. And regarding complex, yeah, we understand very challenging situation and, yeah, we provide huge works and we start to stop all our projects, most of our projects, but some of them, it was on final stages and that is why, yeah, and we understand for us it's very important to finalize these projects Because due to this project, we can produce value-added products for export markets. And for us, especially in current situation, it's very useful for us to produce products with higher price and with higher profitability. And if you think about total CapEx, what we see for this year, because we invest in our CapEx only during the two months, at the beginning of the year, it was approximately $20 million, $25 million. And we understand that our CapEx, it was at minimum around $80 million approximately. And the last question about what?

The caller dropped briefly. I'm just reopening the line. Just one moment. Danielle, your line is opening again if you want any follow-up question.

No, no, no. Maybe, yes.

That's good. Thank you. You answered my question.

Okay. Thank you.

Okay. Thank you. So our next question comes from Abbas Ali from J.P. Morgan Asset Management. Please go ahead.

Thank you very much for the call, especially in these circumstances. Appreciate it. A couple of things from my side. One, in terms of the operational sort of risks that you're facing, obviously very difficult to forecast how things will pan out, but are there particular facilities or assets that you think are at higher risk or when I say higher risk, if they were to come under pressure that you would need additional funding, or do you feel that the business is reasonably far away from where the fighting is happening? So if you could share some more color around that. And second, if you could give me a bit more clarity on the dividend. So I'm just reading some headlines about the dividend not being paid out, but is that relating to last year's dividend that was supposed to be paid here, or no decision on dividends being made for 2022?

thank you for your question the first question no yeah regarding the dividend yeah based of result 2021 yeah due to the but we had with the excellent result but yeah we in current situation we cannot pay and even we even we cannot um imagine how to pay dividend in current situation because we we understand for the most important to to save our liquidity and yes the main our target to to continue to work yeah and we need to some liquidity part is very important the most important thing to have the liquidity to protect company and to uh you know operational now to protect operational company because you understand in current situation it's very difficult to predict what we can have tomorrow yeah what challenges and what catastrophe potentially we can have tomorrow. Regarding the total evacuation, regarding our assets, fortunately for us, most of our assets are located in the center of Ukraine. In the center of Ukraine. On the east of Ukraine, we closed our operation meat processing company Ukrainian bacon this company is located in the next region one month ago we closed this capacity unfortunately and we provide evacuation of our employees yeah maybe approximately by 40 percent or total because it is Ukrainian bacon location is very close to donetsk just 30 kilometers yeah and it was not possible to walk in that condition there it is all okay thank you okay so we have another question from uh raul chopra at captain capital

Please go ahead.

Hi, Victoria. Anastasia, this is Irene from Caspian. Just wanted to ask you about, again, kind of your liquidity position and how, I mean, it sounds like you're paying all the workers and whether or not, you know, you project that you're going to have a liquidity need in the next six to 12 months.

You're completely right, maybe, because for us it's the most important thing to protect our employees, and to reveal responsibility. Because, you know, in Ukraine, we have 28,000 employees, and we always, during all our history, we always tell that employees, our workers, is the best the most important stakeholder for company because yeah our people make this business and you due to the our people mhp was and even currency creation is so successful because it is the biggest our value yeah and is it is the first hour priority you're completely right current our position liquidity position uh liquidity position is around 100 right now is around 160 yeah yeah 60 50 million dollars but at the same time if you look at our uh cash flow yeah in in april in may in april in june we have the next difficult slow because we have the whole so big investment in working capital one of them is a sewing campaign yeah The second, as I said, changes our condition with exports completely. That is why we need to invest so big money in stocks and trade receivables. Thank you.

Thank you. We have a text question from Mathieu Fredette at Converium Capital. Mattia asks, could you please provide a breakdown of exports by mode of transportation, sea versus road versus rail, for 2021 or prior to the start of the war?

You would like to see our pitch about, yes, export breakdown, yeah? Yes. Yes, in 2021, yeah? In 2021, yeah, we exported approximately 400,000 tons. 120 is the Europeans. by trucks, rest of them, it is export to MENA region, Africa, CA country by ship, yeah, through ports. 2022, yeah, you understand that we all, yeah, all our, from Ukraine, all our export goes by truck and, you know, some of them directly to Europe And as this report, Constanze, Clyde, today is the report, but we will see. Are you clear? Are you clear?

Can we go to the next question, please?

Yes. The next question comes from, we have a follow-up question from Abbas Ali at JPMorgan Asset Management. Please go ahead.

Yeah, thank you for that. Just on the green segment EBITDA for last year, can you just explain the growth there? I mean, it's much higher than revenue. What am I missing?

No, no, no. It's a usual situation in our case because the most part, yeah, I will explain, because the most part of the green we have consume internally internally yeah for poultry and accordingly i press sandra all our grain which we keep in stock we need to recognize on all on our balance sheet at market price yeah you understand that because most part of our grain we consume internally but at the same time we include in cost of cost of production of chicken, we include grain at market price. Because for us, it's very important to understand what is our market profitability in grain segments, farming business, and in poultry segments.

Okay, so the EBITDA has basically gone up because the value of the grain has gone up. It's not realized cash just yet.

Some of them not realized, some of them realized because our chicken eats this grain during the fourth quarter and some of this chicken results.

So the $338 million or whatever the EBITDA from the grain segment, how much of that is because of revaluation?

uh it seems to me around if you look around 150 yeah i don't remember you know just one minute but what what i would like to emphasize that is a real grain that we keep in our storage and consume during the first quarter and the second quarter yeah consume in our chickens Yeah, we don't have, yeah, it is completely different situation for other, for example, agricultural company in Ukraine because it's a big issue to sell this grain at market price. But we consume internally, yeah, for chicken production.

Yeah, no, I understand. And when you consume internally, I guess your cost of production for the chicken will go up. So that's where the adjustment will happen?

Yes. Okay.

Okay, so 150 million, is that the amount? Okay, that's fine. Thank you so much.

Thank you. Our next question comes from Catherine Joint from Columbia Threadneedle. Please go ahead.

Hello, thank you very much for the call. I'm glad you're all keeping well. In terms of just a follow-up, so you mentioned Gave the breakdown for the exports via truck and ship. This year so far, have you been able to continue any exports from Ukraine beyond that at the beginning of January, February, so post the war? And then in terms of your plans for your logistics to replace, obviously ports are very important and there's only so much you can ramp up by trucks. Realistically, do you think that this could be a big difference here to really turn the story around or... or is it just too early to say?

I'm so sorry, but we definitely didn't catch your second question because of the connection. Thank you very much. If you can repeat it, that will be great.

Of course, yes. So this is just in terms of the logistics plans that you have to have other options and what sort of progress is that and How much can you really expect that to offset the loss by the ports, basically?

Okay. Thank you for your question. Yeah. Regarding our chicken, yeah, chicken export. We cannot guarantee because you understand there always is a problem. In current situation, we don't know exactly what problems and where next bomb was happened in Ukraine. But our expectation is that we can export every month around 20, 25, maybe 30,000 tons of chicken. We will try to do it.

Okay, great. And have you been able to continue to do any exports since the start of the war?

Yes, we start exports, yeah, after the start of the war, we start exports by the beginning of April, yeah, maybe by the last days of March. Okay. Yeah, during the March, maybe the last days of the March, yeah. Okay.

Okay. Great, thank you very much. Thank you.

Thank you. Our next question comes from Devin Cameron from Aviva Investors. Please go ahead.

Hi there, thanks for taking the question. I was just looking for an update on the current planting season, I guess for spring, summer this year. Have you been able to or are you going to be able to plant as much as previous years or will that go down?

Thank you for your question. The first question is about our land which we cultivate. This year, very close to last year, but less than 10,000 hectares, 350,000 approximately. In some regions, we did not provide in some territories, we did not provide in campaigns. Until today, it looks like everything is Not so bad, even the good. But anyway, to say exactly, because we have a very big history in farming business and sometimes even in May everything is good, but unfortunately the catastrophe happened in July, in August. Until today, everything looks like not bad.

Okay, fantastic. Thank you.

Thank you. Our next question comes from Antonio Gomez at 91. Please go ahead.

Thank you for the time, and congrats in retrospect for some fantastic results. The question I had was, your working capital ended up in 2021 at a very high level, I think partly driven by very high inventories versus historically and then agricultural produce as well i was wondering you know and and first quarter you had really good volumes driven by january february i was wondering how much of that produce agricultural produce and inventories you've actually sold on and actually you know had cash delivered on and and how much is still tied up in working capital but

Yes, why we have so high investment in working capital 2021, I will try to explain because it's very important. At the beginning of the year, 2021, we have so low inventories, yeah, and agriculture produced in stock is the lowest in our history because maybe, yeah, because our, just I would like to mention that our leverage yearbook years ago it was 3.7 yeah and that is why we did not provide investment in working capital because it is so difficult time for mhp it was and that is why yes for this year and that is why if you if you look at for full year result you can see the huge investment in working capital because at the beginning we have almost to zero yeah uh is the main and the main is the main issue why we have so big investment in working capital and the second your question about the Q1 so going into Q1 how much has that declined decline investment in working capital yes decline investment in working capital regarding our poultry segment but regarding our grain segment we have investment because we bought We need to buy fertilizer, pesticides, and seeds.

Sure. But the agricultural produce, did he sell it? That $511 million?

No, no, no. Maybe in January, yes. In February, we sold. Yeah, we sold. But mostly, all of this stock, we will use during the nine months. Yeah? Because mostly for using for fodder.

Okay. And when the next season comes along, will you have capacity to take it in on top of that agricultural produce that you already have in storage?

Sorry? Yeah, please repeat.

So my question is, will you have the storage when the next crop comes along? Do you have capacity to store it?

yeah yeah we have enough storage yeah and yeah and we try yes and we slightly change our crop rotation this year we increase land on the soil and decrease the slightly land on the corn because it's completely different year per hectare and completely different need storage yeah for that yeah we have enough storage

And in terms of, sorry, one final question, just in terms of the export capacity, you mentioned that you've had a lot of supply chain issues. I was just wondering, you know, versus pre-war or, you know, what percentage, you know, of normalization do you think you've reached? And, you know, how much do you need to execute on your plan in the following crop to generate that liquidity to repay your interest?

Your question about the grain, yeah?

Yes, so how much have you been able to export?

Regarding grain, first it's very important just provide export of rates, yeah, and maybe 1,100 of corn because that's our yield, maybe some part in 100,000 of wheat and rest we will use internally.

Thank you.

Thank you. Okay, we have another text question. This is from Natalia Shvigotska from Dragon Capital. Natalia says, thank you very much for the presentation and asks three questions. First, could you please comment on the company's current liquidity and payment discipline among food retail chains in Ukraine? Secondly, also, could you please comment on poultry sales dynamics so far in 2Q22? And thirdly, could you please elaborate a bit on the current poultry production costs? Thank you.

Natalia, thank you very much for your very detailed question. Thank you. Yeah, thank you. Regarding payment discipline, yeah, I'm sure that you understand that all retail in Ukraine now have a lot of problems. Yeah, a lot of problems. We have some problem with discipline and unfortunately even we have not just problem with modern retail and we lost a few hour very good and maybe the most strongest franchising because our partners worked in Severodonetsk, in Mariupol even in Kherson and to be honest This not everything is good. It's personal in this with this people, but unfortunately people lost business completely. Yeah. Yes, we understand that some discipline problem, but we try to reach yeah and to reach agreement and to solve this problem. Yeah. Regarding our sales and our maybe price in domestic market regarding chicken meat. Yeah, if you compare the volume of which we thought, for example, April compared to the last year, completely the same period last year, our sales volume decreased by approximately 10%, 12%. At the same time, price in April, in May, completely the same than we have in January. due to the but but usually is the main is the high season and usually always in the main price higher than because the barbecue season is a higher the high season is higher but not for this year our price completely the same than in january and the last question about what about cost of production no please yeah please yeah correct yeah Yeah, cost of production. No, cost of production now is compared to the last year if you compare to the higher because you understand the corn is the higher because we include corn in cost of production at market price which we have in Ukraine during the harvesting time. And this price was higher than previous year in Romania. Cost of production higher. year to year approximately by approximately by 15 15 20 percent thank you so the next question comes from Stefan Yazlovitsa from BNP please go ahead

Yes, thank you for taking my question. Actually, most of the questions have been answered. Just one quick one on follow-up on the export side. You mentioned that historically only 20% of the exports go towards the EU. Can that number be increased or is that limited because of quotas?

Yes, you're completely right. It's limited by quotas. Yeah, now we are selling out of the quarters, but very insignificant because out of the quarters, custom duty more than one euro. Yeah, it's a huge figure.

Thank you. Thank you. Thank you. So we have a question from Dimitri Ivanov from Jeffers. Please go ahead. Dimitri Ivanov, please, your line is open, please go ahead.

Sorry, can you hear me now?

Yes, we can hear you, yes.

Thank you for, thank you for the call and thank you for keeping us updated in these uncertain times. I have like two questions. First on your Slovenian operations, Perutnina I know that it's difficult for you just to provide any kind of professional guidance for Ukrainian business, but can you give us more color on your operations in Slovenia in terms of the expected volumes, sales volumes, and cash costs expected from these operations? I know that from Q1 2022 results, we saw some positive trends in prices for poultry. But can you give us more color in terms of the cash costs to produce poultry in Slovenia? Is this operation self-sufficient? How do you procure fodder for the production? Can this operation be self-sufficient, etc.? ? So any kind of color in terms of the Slovenian operations for the year 2022 would be much appreciated. Maybe I'll stop here and ask second questions later.

Thank you for your question. This year is a difficult year for all poultry producers in Europe. Not just except not for Perutnina because you understand price of corn and wheat in Europe now is unrealistic figures. Yeah, three. 350 350 euro per ton and this is the main at the same situation with price of gas yeah it is the yeah this is the true driver for increased cost of production that is why yeah uh we don't expect yeah no base of yeah because because cost of production year to year in perutina increased Approximately by 30%, around 25-30%. And at the same time, we have planned to increase our sales volume in Croatia and Serbia because we create new facilities. But we have increased price, but not completely the same, not equal than how increase of cost.

Is it fair to say that EBITDA levels achieved in year 2021 for your Perutnina would be the same?

Yeah, we think that we can achieve. It is our target to achieve, for Perutnina to achieve. No, but based on current situation, it is something... you know, it is, yeah, we need to follow increasing price, but at the same time, it's not very simple task, you understand.

Of course. And in terms of the CAPEX needs for your Slovenian operations, do you need to incur any additional CAPEX, so how should we approach, like, CAPEX?

No, no, just to follow, yeah, you understand that we are must provide maintenance complex. In Ukraine, in Pyotrnina, because without maintenance, we will have the huge problems. And that is very important because if we don't provide maintenance at enough level, I am sure that in this case we will have the huge problem with our cost of production, we stop our production, and such advice. And at the same time, we started some project in Peru to increase capacity in Serbia in some stages, and we will continue. No, not finalize and continue this project.

Understood, understood. So, okay, so that is clear. And my second question is regarding kind of also just want to get more color on the Oxford operation. So, of course... You mentioned that there are lots of issues, including availability of truck drivers to kind of export grain poultry from the country. I'm also curious about sunflower oil, because I know that it's also a material significant contributor to your revenue. So I know that it's kind of difficult to export sunflower oil by trucks. So what's the situation with the sunflower oil and how do you plan just to sell it? Or it will be like mostly domestic sales?

Yeah, you're completely right. Yeah, you're completely right. Sunflower oil export is a huge issue. And we try to find different decision how to provide transportation. And through Barsch, how to say? Barsch? Shipment, yeah? Yeah. Okay. And some of railway. But anyway, the same is a huge problem, but we try to push.

By shipment, you mean like by seaports through Moldova and then to Romania, Constanta, or other destinations? Yes.

You cannot imagine how different destinations, through Constance to Europe, a lot of different clients, a lot of different ways, a lot of different, yeah.

Understood, understood. Thank you very much. Thank you.

Thank you.

Thank you. We have a text question from Nick Ivanov at PGIM. You said that your cash on the balance sheet is around $150 million. Do you have any revolving credit facilities unutilized in addition to that cash?

Revolving credit facilities in addition to the cash we forgot?

Yes, any revolving credit facilities unutilized in addition to that cash.

Ah, commitment, yeah, for some commitment. No, we have some facilities, but, yeah, commitment facilities, but now in Ukraine it's very difficult to attract loans. But we have some negotiations with some banks and financial institutions. But now we try, yes. But we mostly concentrate just for liquidity, yes, for cash. Because we provide a lot of very hard work to attract some loans from different institutions, but no peace. It was what happened.

Okay. And we have one final text question from Anton Smakus from ICU. Anton asks, taking into account limited exports, would you be able to fully reprofile all your poultry capacities to the domestic market? Would there be enough demand for that? Also, are you considering grain export by the railway and what might be the size?

The first question, if I understood you correctly, if we can sell all our production volume on domestic market, yeah? No, no, no, it's completely impossible. No, we produce more, our capacity more than total consumption in Ukraine of meat. No, no, no, of chicken meat. No, it's completely impossible. No, no. And regarding grain by railway, yes, export grain for us, as I mentioned previously, is not so big problem because the biggest part of grain which we produce, we consume internally. But regarding export, yes, we are, grain, anyway, we are considering a lot of different possibilities, through trucks, grain, bars, different. Thank you.

Great, thank you. I'm not seeing any more questions, so I will now hand over to Anastasia and Victoria for closing remarks.

Thank you very much, Tim. Thank you very much, the stakeholders. That was a very nice call. Lots of questions. Thank you for your involvement. And of course, we're here to answer additional questions in case you have them. So please take an opportunity to reach out to our team. And of course, we'll be glad to answer all your questions and queries. Thank you and have a lovely evening and have a lovely day. Goodbye.

Thank you. Thank you very much.

Thank you, everyone. Thank you, man.