MHP SE

Ladies and gentlemen, thank you for standing by, and I would like to welcome you to MHP's Q1 2026 Results Conference Call on the 16th of June 2026. At this time, all participants' lines are in listen-only mode. The format of the call is a presentation which will be followed by a question and answer session. So, without further ado, I would like to pass the line to Anastasia Sobotiuk, Director of Investor Relations. Please go ahead, madam.

Thank you, Daniel. Dear stakeholders, good day, and thank you for joining MHP's conference call covering our first quarter 2026 results. My name is Anastasia, Investor Relations Director, and I'm joined today by Viktoria Petelyushina, CFO of MHP. Together, we will present and discuss the company's operational and financial performance for the reporting period. Please note that today's discussion is based on the press release, financial statements, and investor presentations published earlier today. During the call, we may also discuss our outlook, strategic priorities, and future plans. These statements are based on our current expectations, assumptions, and assessments of market conditions, and are therefore subject to risks and assurances. We encourage you to consider these factors when evaluating the information presented today. With that, let us begin. We go on slide number three of the presentation. Before turning to our operational results, let me briefly comment on the market economic environment in Ukraine. The Ukrainian economy continues to demonstrate resilience despite the ongoing war. Following the recovery in 2023-24, GDP growth remained positive in 2035, although the outlook for 2026 has been revised downward due to continued infrastructure damage, energy challenges, and labor shortages. Inflation accelerated during the first quarter, reaching almost 15% year-on-year in March 2025, driven primarily by high food and energy prices. The national bank expects inflation to gradually moderate over the medium term. The local currency, Ukrainian hryvnia, remains broadly stable, supported by the national bank, active management of foreign exchange market, with only a gradual depreciation expected going forward. Importantly for our sector, Ukraine's agricultural industry remains resilient. The 2035 harvest was stable despite challenging conditions, remember that, providing a solid foundation for agricultural exports and food production. In addition, the 2026 sowing campaign has been successfully completed, with planting progressing largely in line with expectations, despite the ongoing wartime environment supporting as prospects for the upcoming harvest. Overall, while the operating environment remains challenging, the macroeconomic stability has been maintained and we continue to successfully adapt our business to the evolving conditions. With that, let me move to our operational and financial performance for the quarter. We are moving to slide number four of the presentation. Turning to our financial performance, Q1, 2026 revenue increased by 31% year-on-year 1 billion U.S. dollars, primarily driven by the consolidation of U.S. and continued growth of our European operations. Gross profit remained probably stable at 162 million U.S. dollars, as stronger contributions from our European business largely upset margin pressure in the policy segment. Adjusted EBITDA, excluding FRS-16, amounted to $79 million compared with $111 million in Q1 2025. EBITDA margin was 8%, reflecting softer policy market conditions, low profitability in agricultural business due to seasonal factors, and the initial impact of integrating of URSA. Net profit was negative, $85 million, mainly due to foreign exchange losses compared with gains in the prior year period. Looking at our exports mix, poultry products remained the largest contributor, while grain exports increased year-on-year, reflecting continued diversification of our revenue streams. Overall, while profitability was affected by market conditions and integration-related factors during the quarter, our revenue growth demonstrated the benefits of geographic diversification and the strategic expansion of our European platform. Let me now provide more detail on the performance of our key business segments. Slide number five of the presentation. Looking at our segment performance, the business continues to benefit from increased diversification with Europe contributing 35% of revenue and over half of segment EBITDA during the quarter. The poultry segment remained our largest revenue contributor, generating 453 million US dollars in revenue. However, EBITDA declined year on year due to weaker poultry prices, lower sales volumes, and higher production costs, resulting in EBITDA contribution The European operating segment delivered a strong performance, contributing $354 million in revenue and $42 million in data. The inclusion of EUSA had a positive impact on bonds' revenue and earnings and further strengthens our presence in key European markets. Overall, while the poultry segment faced a more challenging market environment, The growing contribution from our European operations and the successful integration of USM helps support the group's overall performance and demonstrates the benefits of our diversification strategy. Let us now turn to the operational highlights across our key business segments, and here I pass my word to Victoria.

Thank you, Anastasia. Good afternoon, everyone. Let's turn to poultry and related operation segment performance. Slide number 6. Despite more challenging pricing environment in exports, poultry market during the Q1 MHP remained focused on operational discipline, with results reflecting the temporary impact of softer export prices. Total poultry meat sales volume declined slightly year-on-year to 152,000 tons as reduced shipment to MENA were not fully offset by high exports to Europe. Processed meat volumes continued to grow, increased by 14,000 tons, supported by high production and our ongoing shift toward add-value products. Revenue for Q1 increased modestly year-on-year to $153 million, driven by stronger pricing and higher volumes of processed meat, alongside a significant increase in complementary products and other revenue, including biogas. On the same basis, revenue declined $524 million in Q4 2025, reflecting softer pricing for poultry meat on export markets. Gross profit decreased year-on-year to $60 million primarily due to a low IFRS 41 biological asset valuation gain compared to the prior year period and higher production costs. Decline comparing to Q4 last year reflected the continuous deterioration in Europe export meat prices and that carried through into Q1 2026. Adjusted BDA, net IFRS 16, decreased year-on-year to $19 million, driven by low gross profit and higher delivering and transportation expenses. The quarter-on-quarter decline was driven by low gross profit, while selling general and administrative expenses remained stable compared with Q4 2025. False price on export markets continued to decline in Q1, however, stabilized and showed positive dynamics in April-May. Looking ahead into 2026, we expect the overall cost and price environment to remain challenging, but current pricing gives us reason for cautious optimism as we move through the year. Turning to our vegetable oil segment, slide number 7. Revenue in Q1 remained probably unchanging year on year at $116 million, but increased significantly at the same period from $81 million in Q4 2025. Reflecting recovery in sales volume and price appreciation across Boston, Florida, and soybean oil. Sunflower oil sales volume recovered to almost the level in Q1 2025 and increased quota on quota, supported by launch of new sunflower extraction line, which increase oil yield and expand overall protein capacity. Soybean oil sales volume continued to decline both year on year and quarter on quarter, mainly due to the high international consumption of soybean oil and the fit recipe and the absence of tool manufacturing arrangement in Q1. Adjustment of BDA slightly improved to 3 million, reflecting the combined effect of volume recovery and favorable commodity prices. Looking in 2026, We expect some improvement in segment profitability, supported by gradual normalization of the raw material cost environment and high production volume. However, the pace of recovery will depend on commodity market dynamics and we remain cautious in our expectations for the near term. Let's move to the slide number 8, Agricultural Operations. Revenue increased to $99 million, driven by higher price across key crops, together with increase of volume of corn and soybean to source party, which more than upset low wheat sales volume. Adjusted to BDA, net IFRS 16 increased to $39 million, supported by higher price of winter crops, wheat and hay seeds. Both winter and spring sowing campaigns have been full complete. The crop stands are in good condition and cross the group farming area. Fareable weather patterns and adequate perception of now support the outlook for crop yield at least in line with 25 levels. Looking ahead to 2026, we expect agriculture to continue delivering positive results, supported by affordable crop price and yield forecast, even as the fuel costs rise, helping upset lower debt in our poultry operation and stabilizing contribution to total EBITDA. Let's proceed to the slide number 9. Several words about European operating segment. Revenue increased year-to-year to $354 million, driven by consolidation of UESA, while decreasing slightly quarter-on-quarter as outbreak of African swine fever in Spain put downward pressure on pork prices. Poultry meat sales volume grew year-on-year, driven by high sales in both domestic and export markets, while processed meat volume remained stable. Average price for both poultry and processed meat held steady both year-on-year and quarter-on-quarter. Gross profit increased year-on-year to $65 million, mainly due to the U.S. effect, while the quarter-on-quarter increase was related to favorable IFRS 41 fair value movement, reflective partial recovering of peak price in Spain in March and April. Adjusted to the date, net IFRS 16 also grew, broadly in line with development of gross profit. Looking ahead to the remainder of 2026, we expect price for poultry and pros meat in the European operating segment to remain broadly stable, with sales volume continuing to grow. This is expected to support steady growth in adjusted EBITDA net FRS 16 over the course of the year. Slide number 10. A few words about our cash flow, debt, and liquidity. Operating cash flow for Q1 decreased year-on-year to $14 million, driven by low cash earnings, mainly reflecting negative trends in extra fortune and prices. Working capital representing an investment of only $20 million in Q1 2026 primarily driven by investment in inventory and crop fields ahead of sowing campaigns, partially offset by consumption of agricultural produce harvest in 2025 and increase in payables. The investment was lower than Q1 last year, which had reflected one-off increase in receivables last year. Capital decreased to $43 million with capital development mainly across key strategic areas focused on the maintenance and modernization of existing facilities. Regarding debt, the increase in long-term debt and reduction in short-term debt reflected the repayment of $550 million senior notes due to 2026, and the issues of the new Eurobond 550 due 2029. Cash position was around 518 million as of 1 March 2026. By the end of the first quarter, the group compliant with all banks' covenant, the group's acquisition leverage ratio increased to 2.6, below the defined limit 3.0 compared to the 2.5 by the end of last year. A few words about subsequent events. Subsequent to the reporting date, the group entered into the Share Purchase Agreement for acquisition of stake of 100% in Nisiakos, the leading vertical integrated poultry producer in Greece. The transaction is structured in three tranches, through which the group will acquire 70% of share capital. with source completion expected in the first quarter of 2027, subject to customary closing conditions, including regulatory clearance. The group has also granted the existing shareholders a put option of the remaining 30% accessible between 2030 and 2035. Yes. As previously disclosed, the consideration for the acquisition is based on a pre-agreed valuation methodology linked to the target's enterprise's value and financial performance, subject to customary adjustments for cash, debt, and voting capital. In line with our announcement, the amount payable at each stage of the transaction will be disclosed at the relevant time. And now I give the floor to Anastasia.

Thank you, Victoria. In closing, Despite ongoing challenges in Ukraine, we continue to demonstrate resilience across our operations, supported by our diversified and vertically integrated business model, as well as dedicated and professional team. At the time, we are making significant progress in executing our long-term growth strategy in Europe, as you mentioned. This includes the continued development of Perugino Ptui, the successful launch of our pet food business in Croatia, which is a part of Perugino Ptui Group, the integration of Juveza in Spain, and the recently announced plans to acquire Missiakos in Greece, as you just recently elaborated. These milestones reflect our strategic vision of transforming MHP into a leading international food, and agribusiness group with Ukrainian roots. By combining the strengths of our Ukrainian operations with a growing European footprint, we are building a more diversified, resilient, and sustainable business for the long term. Thank you for your continued support and trust in MHP. We are ready to answer your questions now. Daniel.

We will now move to the question and answer section. If you would like to ask a question, please press star 2 on your phone and wait to be prompted. If you are dialed in by the web, you can type your question in the box provided, or request to ask a voice question. We'll wait just a moment or two for the questions to come in. Kind note that we can take the voice questions during the call, and after the call, the MHP IR team will get back to you on your written questions. Our first question comes from Stella Creech from Bike Race. Your line is open. Please go ahead.

Thank you. And afternoon, everyone, and many thanks for all the updates today. There was two areas, if I could ask on. The first is on the Greece acquisition. Could you tell us why you decided to go ahead with another acquisition so soon after Uvesa? Would it also be possible to perhaps give an EBITDA guidance range in the same way that you did for Uvesa in the early days there? And I appreciate you're going to wait until we make some kind of valuation type announcements, but any kind of indication at this stage about how that would be funded would be great. And the second thing I want to ask about was the short-term debt. And if you plan to pay down some of that short-term debt with cash or perhaps do some refinancing, that would be great. Thank you.

First of all, thank you for your question regarding why we decided to provide the new acquisition. First of all, you need to understand during the whole of our history, because during the last 15 years we were working about new acquisitions and trying to find the right target for NHP in Europe. Unfortunately, or unfortunately, it is a very difficult job. And regarding when we decided to find this company, we understand that it is a good company with For MHP, what is very important, because we see a lot of room for improvement and we see a lot of potential for growth. This is for the Greece market, demonstrates on growth, poultry market, and we understand how we can provide growth on capacity of this company. And we see how we can improve cost of production, efficiency of the company. And that is why, and completely accordingly, our strategy, which we announced during the last few years, that the main target, the main strategy for MHP is to increase our European business. pure European business. And, you know, we have very good trade records with Perutnina, and we clearly understand how we can do it with right targets, not with all companies, but with right targets. And the second part of the question about how we will finance, you completely right, and we discussed a lot during our issue with Eurobonds. In general, yes, we understand that we will, yeah, for us is one resource is how we can provide acquisition, yeah, provide acquisition and finance acquisition through European debt, through European debt, which we can put in balance sheet of our European business. And you asked about the size of Nisi Yakos, size of Nisi Yakos, it is a very, yeah, as we announced in our press release, you know, today the revenue is around 500 million euros, and the profitability with the margin of this company today generates around 8-9%. Yeah. And the second question about our short-term debt. Right now, our short-term debt is 350, but at the same time, we always have the same level of short-term debt. During the few last years, our short-term debt for financing our current assets is approximately 300 million dollars. Thank you.

Thank you very much. Our next question comes from Alexey Soroka from Amunji. Please go ahead. Your line is open.

Yes, hi. I hope you can hear me. Some of my questions have been answered, but maybe we can go back and focus on the poultry business just because I was dialed in late because I have a double book. Maybe you can repeat that. In terms of some underlying margins, just explain what's going on, what impacted the margins in the first quarter, and what you expect the overall effect to be, and maybe refresh guidance for the full year, if you haven't done so. Or if you have done so earlier in the call, and I missed it.

Thank you for your question. Yes, I told you in the presentation that segment policy, now we are in a very challenging environment. The main reason why we have the low financial result in the first quarter is the low export price, especially low price, export price in Europe. we understand especially in the first quarter to be honest always in the first quarter is a low season and now we see some signal for slightly improving price but anyway even today price European price remain is a low level that for example compared to the first quarter last year that is why we understand that For 2026, our poultry segment will generate worse results compared to 2025. But at the same time, our expectation and we see the better financial results in agriculture segment, in European operation segment, even in crushing segment. And if you speak about... It's very difficult, to be honest, to announce and to forecast our ADD for full year, but we always try to be conservative, and our current expectation is about 520-550. Our ADD, local company for 2026.

Okay, thank you.

Sorry, the European prices, how much lower are they year on year? May I ask so that I have a sort of understanding?

European prices now lower compared to the first quarter approximately by 15%. Despite on the product, but if you think about the average, around 10-15% lower.

Year on year.

No, fourth quarter compared to the year-on-year it would be around only 5%. but you understand that in the first quarter we had significant increase in our cost of products, not significant but increased because we had very cold winter with temperature minus 25 degrees and price of electricity it was very high in Ukraine during this quarter and that is why our cost of production in first quarter was by around 7% to 8% high compared to the last year, year-on-year. Today, the trade is more or less stable, regardless of cost of production.

Okay, thank you very much.

Thank you very much. Our next question comes from Natalia Shpugotska from Dragon Castle. Your line is open. Please go ahead.

Good afternoon. Thank you very much for the presentation. I have a question on the company's operating cash flow, please. During the presentation, it was mentioned that weaker operating cash flow came due to weaker poultry segment results, but as I see, poultry segment cash did not before the era of 16 and I guess 41. there is only like 25 million lower year-on-year, while operating cash flow before working capital changes declined by roughly 70 million. Would you please elaborate on what also draws the operating cash flow? Thank you very much.

Your question, Natalia, if I understood your question correctly, your question about why we have the operation cash flow better in changes than our financial result, yeah? Yeah, operation cash flow change worse than the profitability on a cash basis. Operation cash flow, it is the way you look from segment result, yeah? Well, yeah. Operation Control because Operation Control after investment in working capital, yeah. But at the same time, as I told you, investment in working capital this year was slightly less than last year. You're question about just poultry segment or about food? No, no, no.

for cash flow operations that declined from $101 million in Q1 2025 to $34 million in Q1 2026.

No, because it is, maybe it is, yeah, because unfortunately I don't see real figures right now, yeah, and maybe it is after payment, interest payment, yeah? I guess so. Yeah, and that is why it's a big difference, yeah. And that is why it seems to me it's a difference. Net cash flow operation, last year it was 45, this year 14. Yes? Because now I see, you know, this is before.

Yes, this is after working capital changes, but before working capital changes, the decline is much more material, like from 101 to 34.

Thank you very much.

Just a reminder, if you would like to ask a question, please press star 2 on your phone and wait to be prompted. If you are dialed in by the web, you can also request to ask a voice question. Our next question comes from Dimitri Ivanov from Jefferies. Please go ahead. Your line is open.

Hello, can you hear me?

Yes, yes. Yes, we can.

Yeah, thank you very much for the presentation. I have a few questions. If I may, I will maybe ask them one by one. Maybe the first one is just can you repeat the EBITDA margin at NITIACO's business? Was it 8% or 10% EBITDA margin you mentioned? No, 8-9. 8-9. 8-9. Okay. And how much debt is there like now? How much debt?

To be honest, we were ready to describe this information, not right now, for the next year, when we will have the first launch. Because to be honest, we provide an announcement about this company, and to be honest, we don't want to provide some special information only in one conference call.

Understood. And the first stage of acquisition... will result in ownership of above 50%. So you will consolidate it after the first stage of the transaction.

Yes.

Yes, right? Positive answer.

Yes, we have a few options, but our aim is to be consolidated. But anyway, we have the other option, we are flexible.

Okay, maybe just like another question. Your leverage like calculated under Coronet is 2.8 times. I remember you did some calculations for your LSA on some kind of expected pro forma net leverage. I'm just curious if you've done these calculations for this like pro forma acquisition of NITIAC or how much, what's like expected increase in net leverage with this acquisition? Will it go above three?

We understand and our target after acquisition we must be in average below 3.

Okay, so pro forma acquisition you will be below 3? We need to pro forma this. Below 3.

Okay. Not just below 3. Significant below 3. Close to the 3, but anyway below 3.

That's helpful. Thank you very much. So a few more questions from my side. I think you mentioned you did a guidance of at least $520 million for this year, right, basically. And in first quarter, you already, like, generated $87 million, right, basically. I'm just trying to do, like, a simple math. So basically your guidance implies that in the rest of the three quarters, you will generate around 145 million EBITDA each quarter. So it implies like material increase in quarterly EBITDA generation from Q1, right, basically. Yeah, yeah, yeah.

It's very simple.

Sorry, sorry, sorry for my interruption. It's a very simple explanation because, first of all, Yeah, agro segment, you understand, 40% of our business, of our contribution of EBD, it is a farming business. And the biggest part of farming business, yeah, generate mostly in the second, third, and fourth quarter. In the first quarter, close to the zero.

Understood. So, basically, we should expect...

Yeah, always in the first quarter. We have during all our life, the first quarter, we have the lowest financial result.

The lowest. That's very helpful. Okay, that's helpful. Okay, so basically you will see material improvements in the next quarter. Yes. That's helpful. Yes. Critex guidance. You previously guided 252 to 75 million for the whole group for the year. Is it still... Is it still the same guidance?

Yes, it is still the same guidance.

So 50 to 75. Okay, that's helpful. And probably last question, basically, I'm just trying, I'm looking at your liquidity position. You're kind of sitting on a half billion cash at the moment, like 518 million dollars. I'm just trying to understand, why do you need so much cash in your balance sheet? Basically, it's half a billion dollars cash. Can you expect that other material outflows you should expect? Half a billion dollars is a lot of money.

Yeah, Dmitry, Dmitry, it is a very good question. But it was. It was on the 31st of March. Now, our cash position, because you did not ask me what is the current our cash position. Our current position is around $300 million. And internally, we have the rules. We would like to keep this minimum because you understand what condition we are living in. And our minimum cash position is around $200 million.

And why did it go to $300 million? Did you repay any loans? Like, because your cash position went down by $280 million. So what happened?

No, no, no, because, yeah, no, because, first of all, yes, we repay some little bit, yes, we repay some loans, yeah, because you're completely right, $400 million is a bit. And we have some investment in working capital regarding our agriculture campaign.

So it will be working capital outflow in the second quarter, right, basically?

Yeah, because it's temporary.

Okay, are we talking about like 10, 20, 50 million dollars, like approximately?

Approximately, but now on the balance sheet we have around 300.

No, no, no, the question is how much working capital outflows we should expect in the second quarter of this year.

Yes, we have the clear target. We have the clear target because we would like to have reinvestment in Coppel Capital for full year around minimum $50 million. Because last year we had this huge investment in Luton Capital, and our target provides optimization of our position, current assets. And as a minimum, we would like to have reimbursement, reinvestment $50 million.

Okay, that's helpful. I'll get back into the queue. Thank you very much for your interest.

Thank you very much. Our next question comes from Mary Gatrania from Salik. Your line is open. Please go ahead.

Thank you for the presentation. Mine is a quick question about EBITDA. You mentioned that the expectations of that year end is 520 to 550. How much of it comes from Ubersa and what portion is from the group before Ubersa? Thank you.

Our total data from our European segment, Perugina and Vesta, because we consider it as one segment, for this year around 160 million.

Okay. Thank you very much. Our next question is a follow-up question from Stella Creech from Bipuris. Your line is open. Please go ahead.

Thank you so much. If I could just follow up on the UBESA, it did look like EBITDA jumped quite a bit, quarter on quarter, and I know that you were experiencing the impact of the African swine fever towards the end of last year. Could you just talk us through kind of what happened in Q1 and why you saw such a pickup in EBITDA?

Yeah, no, no, no. Especially now, it is the quarter and quarter. You were question about first quarter, fourth quarter, first quarter last year and this. It is different about revaluation of peaks. Yeah, because last, in the first quarter, we have negative impact, result of AFRS 41. Here situation with price, peak price, pork price in Spain, was stabilized, has stabilized, and that is why we have a revolution, positive effect. This is the main reason why it's different.

Okay, that's super. I mean, it's been very helpful that you've been adding in these new disclosures around UBESA. I think, you know, anything that we can perhaps have in terms of more information on it, that would be great as well, going forward. Thank you.

Thank you very much. Just a reminder, if you would like to ask a question, please press star two on your phone and wait to be prompted. If you are dialed in by the web, you can also request your voice to ask a voice question. Our next question comes from Vivi Vera from Goldman Sachs. Your line is open, please go ahead.

Hi, thanks for the presentation. wanted to get some more color around the European operating segment. Last year, we see IAS loss of $17 million versus a $14 million gain in 1Q. But I understand these are like non-cash adjustments. And if we adjust that, the EBITDA actually declines and the margin is also quite low. So wanting to hear from you, how do you look at profitability and how do you expect cash EBITDA, which is after adjusting for IAS, how do you see that evolving? Thank you.

Okay, yes, you're right, the effect of 41 standards is non-cash, but your question about year-on-year or quarter-to-quarter? Sorry?

Year-over-year.

Year-on-year, yeah? Yeah. Okay. But, yeah, if you look at year to year, our EBDA, even exclude effect of 41 standard, increased. Yeah, increased, yeah, because last year it is completely understandable because we include the financial results from U.S.A. Because for me it's very strange why you tell that EBDA decreased. Because if you look at year to year, exclude effect of 41 standard, our EBDA increased by... By telling me, yeah. Okay, okay, maybe you... Margin, okay, margin may be declined, but yes, okay, maybe we will send you some explanation because regarding margin. But at the same time, we understand it's very important that in the first quarter, we have the bad influence, especially in the U.S. in pork segment because we have very, very low profitability in pork segment because it was avian, swine flu. Last year, and the situation now has stabilized, but anyway, today the price of pork is very close to the cost, but at the same time, we see the trend for improvement. And that is why we saw that other very important points, especially in the U.S., are always price in the first quarter, the lows, because it's a low season, and price will improve. And cost of production, we do a lot of improvements in the U.S., and we expect significantly better results in the second, third quarter, especially in the U.S. Thank you.

Just a final reminder, if you'd like to ask a question, please press star 2 on your phone and wait to be prompted. If you are dialed in by the web, you can also request to ask a voice question. We'll wait just a moment or two for the next questions to come in. I'm not Sorry, our next question comes from Antonio Gomez from 91. Please go ahead. Your line is open.

Hi there. Thank you for your time. I just kind of wanted to break down the cost increases in the poultry segment on the course, please. So it seems like you have both lower gross margins and higher SCNA if you're looking year on year. You know, could you just break down what's happening in terms of the cost increases, why the gross margins have fallen significantly, and also the same with the SG&A. You know, you mentioned increased freight costs. You could just give a little bit more detail there. That would be helpful. Thank you.

Yeah. Yeah, thank you for your question. Regarding SG&A, if you compare the quota to quota, is SG&A in 47 completely the same level? Because, yes, we last year in 2025, in the second quarter, we had some changes in SG&A regarding increased salary, increased logistic costs, transportation. But if you compare the fourth quarter, first quarter 2025, with first quarter 2026, our level of SG&A in poultry segment completely the same. The second issue, yes. Cost of production of chicken meat increased compared to the last year approximately by 7%. If the main contribution was because we consume more gas, consumption of gas was significantly higher compared to the previous year due to the weather condition, temperature minus 25, and the price of the gas higher. by approximately 40%. And electricity price was higher year to year, almost 60%. It is the main contribution for increase our cost of production.

So going forward, looking at the rest of the year for the poultry segment, it sounds like the SG&A costs are not something that are going to go down. Is it the same for the... The SG&A costs...

Yeah, Antonio, the S&I cost will be the same which we had in the first quarter during the 2026. I don't see any signals and any driver for decrease. Yeah, but at the same time, we don't expect any increase. It is good. Regarding cost of production, our expectations, the cost of production year to year will be not 7%, 8%. It will be high approximately by 4%, 5%. Because, for example, right now the situation with electricity, with price of electricity has stabilized. And for full year, this current price of grain, because maybe from the new harvest it would be higher price, now we will see. But now we see that cost of production will be high approximately for five seconds.

Okay, so from a quarterly run rate, that poultry segment going forward, what's the kind of EBITDA that it's going to be able to generate? This quarter's seen relatively low. You're implying it's going to get better. Is it going to be, what, around the $50 million run rate per quarter, 60, 70? I mean, your high last year was 80, so just trying to get a range here.

No, no, as I told previously that we understand that our PDA from poultry segment this year, because now we stay in a very challenging environment, will be lower than previous, but it will be compensated partially by a better result in agriculture segment and in our European operation segment. But it would be lower. Okay. Due to the cost of production and the special price

From a run rate perspective, on a cost to EBITDA perspective, is that something you could give the guidance to?

No, no, no, no. I cannot provide any guidance, especially for . We will provide guidance for full financial results.

Thank you.

Thank you very much.

Okay. I'm not seeing any more questions. Thank you all for sending your questions, so perhaps I can hand back to the MHP team for the closing remarks.

Thank you very much, dear stakeholders. It was a great opportunity to receive all your questions you were interested in. Thank you for being with us during the call, and of course, if you would like to have a meeting with us, raise other questions, and discuss any questions which remain outstanding, please send me a message by email or direct the questions which you would like to be answered. Thank you and have a lovely day. Bye-bye. Thank you so much.

Good day. Bye. That concludes the call for today. Thank you all and have a nice day.