Cherkizovo 1H 2011 profit up as poultry demand jumps

Russian meat producer Cherkizovo Group has posted a 1H 2011 net income of $66 million under US GAAP.

The bottom line is up 11 per cent year-on-year from the 1H 2010 of $74.1 million, with 1H adjusted EBITDA decreased 6 per cent year-on-year to $105.7 million from $113.0 million in the 1H of 2010 falling, despite 1H revenues rising 20 per cent year-on-year to $689.1 million from $572.8 million in the 1H 2010. The 1H results included a 2Q 2011 net profit of $48.3 million which is 15 per cent up to from $42.1 million posted for 2Q 2010, with Adjusted EBITDA also up 12 per cent to $71.6 million from $63.4 million in 2Q 2010 on the back of 2Q 2010 strong revenue growth of 24 per cent to $382.5 million from $307.6 million in the 2Q of 2010. Cherkizovo CEO, Sergey Mikhailov, said that graduate organic volume growth and solid financial performance supported by increasing demand will continue supporting the group’s operational efficiency.“Despite the challenging operating environment at the beginning of this year, we have delivered a strong set of results across all segments in the first half of 2011, significantly improving our performance in the second quarter driven by an improving pricing environment, rising demand and continued cost efficiencies.  Moreover, we have confirmed our status as the most active player on the Russian meat market through the acquisition of Mosselprom, one of Russia’s best-known poultry producers. Furthermore, we have started construction of the country’s largest poultry production complex in the Lipetsk region.”Mikhailov added that government support and extensive production expansion has helped to meet growing demand and maintain high-quality production.“Already this year, we opened two large poultry production facilities in our Bryansk and Penza clusters and an incubation site in Bryansk, while we plan to launch a processing facility and another incubation facility in Penza which will be amongst the largest not just in Russia, but across Europe. We also welcome the government’s recent decision to offer direct subsidies to offset sharp cost increases, and allow domestic producers to continue developing quality local products, despite the difficult trading conditions.”