Russian poultry firm Cherkizovo reports mixed results
However the weakening of the rouble against the dollar puts revenue down 2% in converted currency terms, to $376.6 million. Gross profit was up 48% to $95.1m from $64.4m in the first quarter of 2013, while in RUB, gross profit increased 70%.
Net profit stood at $25m, compared to a loss of $0.6m in the comparable period of 2013, while adjusted EBITDA doubled from $28.4m to $56.2m.
During the accounting period, the group acquired LISKO Broiler, one of the country’s largest poultry producers, which saw Cherkizovo increase its market share by two percentage points to 13%.
Among its other business developments was the launch of a case-ready production line at its meat processing plant in Moscow. The new line is capable of producing 100 tonnes of ready-to-cook meat per day.
Sergei Mikhailov, chief executive, said: "Cherkizovo demonstrated very strong results in the first quarter. The company’s revenue increased by 13% in RUB, and adjusted EBITDA more than doubled. We can definitely say that after a very challenging 2013, the group returned to strong profitability."
He said the market environment had been quite favourable throughout the quarter, with grain prices relatively stable and poultry meat and pork prices starting to increase.
"Due to a shortage on the pork market and stoppage of imports, growth of live hog prices was very rapid starting in March. As a result, Cherkizovo Group, which completed its long-term investment programme in the pork division last year, could gain a strong financial return from these investments.
"The rapid growth of profit in the pork division compensated many times over for the inevitable pressure on margins in the meat processing division. While many meat processors are facing difficulties as a result of the shortage on the pork market, Cherkizovo Group is able to supply its meat processing division with high-quality raw meat, thanks to its high degree of vertical integration."
