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Cherkizovo Pre-Close Trading Update

by 5m Editor
19 February 2009, at 12:01pm

RUSSIA – Cherkizovo OJSC, one of Russia's leading integrated and diversified meat producers, has shown volumes in its pork and poultry divisions up in a pre-close trading update in advance of its annual results for the year ended 31 December 2008. The full year financial results will be reported in April 2009.

Poultry Division

Total sales volumes in the poultry segment in 2008 were up 12 per cent compared to 2007, increasing from approximately 167,000 tonnes to approximately 187,000 tonnes of slaughter weight.

In 2008 Cherkizovo reconfirmed its number one market position as the leader of the Russian poultry market, and provider of the largest and most well-known federal brands both in chilled and frozen poultry.

Prices for Cherkizovo poultry sales increased by 11 per cent from 57.71 rubles per kg in 2007 to 63.87 rubles per kg in 2008 (excluding VAT). In dollar terms prices increased by 14 per cent from $2.26 per kg in 2007 to $2.57 per kg in 2008 (excluding VAT).

Pork Division

2008 was a landmark year in the development of the pork segment, as Cherkizovo completed construction and commenced production at its new greenfield farms in Lipetsk and Tambov.

Sales volumes in the pork division were up 40 per cent to approximately 39,000 tonnes, compared to approximately 28,000 tonnes in 2007.

Prices in ruble terms increased by 11 per cent in 2008 from 61.58 rubles per kg in 2007 to 68.36 rubles per kg in 2008 (excluding VAT). In dollar terms, prices increased by 14 per cent in 2008 from $2.41 per kg of live weight in 2007 to $2.75 per kg of live weight in 2008 (excluding VAT).

Meat Processing Division

Sales volumes in the meat processing segment remained largely flat, but were slightly lower year on year, down 3 per cent to approximately 145,000 tonnes.

Average prices increased by 19 per cent from 87.51 rubles in 2007 to 103.86 rubles in 2008 (excluding VAT). Segment prices in dollar terms increased by 22 per cent from $3.42 per kg in 2007 to $4.18 per kg in 2008 (excluding VAT).

Commenting on the performance Sergei Mikhailov, CEO of Cherkizovo Group said: "Overall, we are satisfied with the Company's performance in 2008, despite the challenging operating environment. "We have continued to progress against our strategy in all three segments of the Group. We are confident that we will produce a strong performance in 2008, and in 2009 we will concentrate on further increasing the efficiency of our operations."