March 14, 2013
Cherkizovo posts a 66% rise in 2012 earnings
After posting a 66% increase in 2012 earnings, Russia's Cherkizovo forecast 2013 as a "very challenging year" due to high grain prices.
The company, a major producer of poultry and pork, reported a rise in 2012 net profit to US$225.2 million from US$135.9 million in 2011, helped by higher sales and cost savings.
The group also benefited from direct and indirect subsidies from the state, including profit tax breaks for agricultural enterprises and interest rate reimbursement.
But the combination of grain prices "at historical highs and pork prices at historical lows" will negatively affect the company's performance in 2013, Chief Executive Sergei Mikhailov said in a statement.
Cherkizovo said government support will be key in 2013, including direct grants to agricultural enterprises - a measure it said is currently under consideration.
The company's revenues were up 7% in dollar terms last year to US$1.58 billion, while increasing by 14% in roubles as it expanded production capacity.
Earnings before interest, taxation, depreciation and amortisation (EBITDA) grew 29% in dollars to US$314.6 million, with an EBITDA margin reaching a record 20% compared to 17% in 2011.
Its Moscow-listed shares were up 2.62% by 0840 GMT against a 0.32% fall in the broad market index.
