ShapeShapeauthorShapechevroncrossShapeShapeShapeGrouphamburgerhomeGroupmagnifyShapeShapeShaperssShape

Solid Performance for Cherkizovo

5 December 2011, at 10:35am

RUSSIA - Cherkizovo Group , one of Russia’s leading integrated and diversified meat producers, has announced strong organic volume growth and solid financial performances in the third quarter and nine months of the financial year.

Revenue increased by 24 per cent to $1078.6 million from $867.5 million for the nine months of 2010 and increased by 18 per cent on a rouble currency basis.

Revenues rose by 32 per cent to $389.2 million in the third quarter of 2011 from $294.7 million for the third quarter of 2010 and by 25 per cent on a rouble currency basis for the same period.

Adjusted EBITDA increased by six per cent to $177.9 million from $167.7 million for the nine months of 2010 and by one per cent on a rouble currency basis. Adjusted EBITDA rose by 32 per cent to $72.2 million from $54.7 million in the third quarter of 2010 and increased by 25 per cent on a rouble currency basis.

Gross profit was up by 11 per cent to $270.1 million from $243.5 million for the nine months of 2010 and by six per cent on a rouble currency basis. Gross profit in the third quarter increased by 25 per cent to $100.4 million from $79.9 million and increased by 19 per cent on a rouble currency basis.

Group gross margin was a robust 25 per cent for the nine months and 26 per cent for the third quarter, the company said.

Net income fell by one per cent per cent to $108.4 million from $110.0 million for the nine months of 2010 and by six per cent on a rouble currency basis. However, net income in the third quarter rose by 18 per cent to $42.6 million from $35.9 million and increased 12 per cent on a rouble currency basis.

Sergey Mikhailov, Chief Executive Officer of Cherkizovo Group, said: “Despite the challenging operating environment at the beginning of this year, we have delivered a solid performance across all segments in the first nine months of 2011, in line with our targets. The Group achieved a 24 per cent increase in revenue and growth in Adjusted EBITDA of 6 per cent, resulting in a healthy 17 per cent Adjusted EBITDA margin.

"Moreover, we have confirmed our status as the most active operator in the Russian meat sector through the acquisition of Mosselprom, one of Russia’s best known poultry producers, at the start of 2011. We have also started construction of the country’s largest poultry production complex in the Lipetsk region.

"We have completed the integration of Mosselprom within the Group’s production structure. As a result of the synergy benefits we have received, operational efficiency is increasing in our poultry segment, where we continue to deliver against our large scale capacity increase projects. In addition to opening two large poultry production facilities in our Bryansk and Penza clusters, we have also launched two incubation facilities, which are amongst the largest not just in Russia, but across Europe.

"Our results in the pork segment demonstrate that we have successfully overcome the consequences of last year’s extreme weather conditions, and are now witnessing production growth. In the course of the first nine months of the year, we have launched three breeding facilities at our greenfield pork farms in Tambov, Voronezh and Lipetsk. We have also integrated our new asset “Orelselprom”, which was acquired through the Mosselprom transaction.

"In the meat processing segment we see a steady increase in demand for our meat products, while this year we are concentrating on improving the product mix in favour of value added products.

"In terms of the pricing environment, we see that in poultry the prices so far this year have been relatively flat, while in pork they have demonstrated some growth.

"Overall, management is optimistic that the Group will produce a strong financial performance for the full year in line with our expectations and will further continue to deliver against its strategy.”