Cherkizovo Group has published its trading update for the first nine month of this year.

Poultry division

Sales volumes in the Poultry division for the first nine months of 2011 increased by a robust 26 per cent to approximately 185,620 tonnes of saleable weight compared to 146,830 tonnes for the first nine months of 2010, reflecting organic volumes added in the Bryansk cluster and sales by Mosselprom, acquired in May 2011.

Prices for poultry sales in US dollar terms increased by eight per cent from US$2.33 per kilo for the first nine months of 2010 to $2.52 for the first nine months of 2011. Compared to the second quarter of 2011, the price in the third quarter was almost flat at $2.53 per kg.

Prices in rouble terms increased by three per cent from 70.56 roubles (RUB) per kg for the first nine months of 2010 to RUB72.40 in the first nine months of 2011. Compared to the second quarter of 2011, the price in the third quarter increased one per cent to RUB73.47 per kg.

Pork division

Sales volumes in the Pork division for the first nine months of 2011 increased seven per cent to approximately 65,800 tonnes of live weight, compared to 61,250 tonnes for the first nine months of 2010.

In US dollar terms, prices for pork sales increased by 15 per cent from $2.38 per kg of live weight for the first nine months of 2010 to $2.74 for the same period of 2011. Compared to the second quarter of 2011, the price in the third quarter was almost flat at $2.80 per kg.

Prices in rouble terms increased by nine per cent from RUB72.09 per kg for the first nine months of 2010 to RUB78.90 for the first nine months of 2011. Compared to the price in the second quarter of 2011, the price in the third quarter increased by two per cent to RUB81.37 per kg.

Meat processing division

Sales volumes increased by five per cent to approximately 108,420 tonnes from 102,870 tonnes for the first nine months of 2010.

Prices in dollar terms increased by 19 per cent from $3.82 per kg for the first nine months of 2010 to $4.54 per kg for the first nine months of 2011. Compared to the second quarter of 2011, the price in the third quarter was flat at $4.66 per kg.

Prices in rouble terms increased by 13 per cent from RUB115.52 for the first nine months of 2010 to RUB130.56 per kg for the first nine months of 2011. Compared to the price in the second quarter, the price in the third quarter of 2011 increased by four per cent to RUB135.27 per kg.

CEO's comment

Commenting on the performance, Sergey Mikhailov, CEO of Cherkizovo Group said: "In the first nine months we have delivered strong results across all segments in line with our targets.

"In poultry, we have continued our organic growth, and in addition to opening two large poultry production facilities in our Bryansk and Penza clusters, we have 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 weather conditions, and are now witnessing production growth.

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 expects that the Group will produce a strong financial performance for the nine months and will further continue to deliver against its strategy," said Mr Mikhailov.

All prices exlude VAT. For price calculation in US dollar terms, the Company used the average exchange rate for the first nine months of 2011 of RUB28.7664 per US$1, for the first nine months of 2010 the average rate was RUB30.2538 per $.