Cherkizovo Group, one of Russia's leading integrated and diversified meat producers, has announced second quarter and first half unaudited financial results for 2011, with strong organic volume growth and a solid financial performance.
Revenues increased 20% to $689.1 million from $572.8 million for the first half of 2010, and increased 15% on a rouble currency basis. Revenues increased 24% to $382.5 million in the second quarter of 2011 from $307.6 million for the second quarter of 2010, and increased 15% on a rouble currency basis for the same period.
Sales volumes in the Poultry division in the first half of 2011 increased by a robust 18% to approximately 117,990 tonnes of sellable weight compared to approximately 99,860 tonnes for the first half of 2010.
Prices for poultry sales in dollar terms increased by 9% from $2.30 per kg in the first half of 2010 to $2.51 per kg in the first half of 2011 (excluding VAT)*. Compared to the first quarter of 2011, the price in the second quarter increased by 7% to $2.59 per kg.
The company also had many recent business Developments. Cherkizovo opened the poultry breeding facility, Komarovka, at its Penza cluster. The facility, which was built as part of Cherkizovo’s ongoing poultry capacity increase project in Penza, consists of 34 bird houses, with a combined capacity of almost 1.1 million broilers.
In addition the company opened a second line at the poultry breeding facility in its Bryansk cluster. It consists of 26 bird houses, with a combined capacity of almost 880,000 broilers. The bird houses will be populated using the Group’s own hatcheries, and equipped with state-of-the-art technologies that reflect the latest innovations and best practices in poultry keeping.
Cherkizovo completed an acquisition of 100% of Mosselprom — a diversified vertically-integrated agro-industrial group and started construction of the Elets agroindustrial complex in the Lipetsk region, which is a unique integrated poultry production facility where production is set to start in 2013.
Challenging operating environment
“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”, said Sergey Mikhailov, Chief Executive Officer of Cherkizovo Group.
“Accordingly, we showed Group revenues of $689.1 million, adjusted EBITDA of $105.7 million and a robust adjusted EBITDA margin of 15%. 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.
“We are now in the process of integrating Mosselprom within the Group’s production structure. Achieving synergies will help us to increase operational efficiency in our poultry segment, where we continue to deliver against our large scale capacity increase projects. 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.