March 29, 2011

Cherkizovo's 2010 net profit grow by 21%

Cherkizovo Group's 2010 net profit grew by 21% on-year to US$144.4 million to US GAAP, the company said on Monday (Mar 28).

The company's revenues increased 17% to US$1.188 billion last year. Adjusted Earnings before Interest, Taxation, Depreciation, Amortization (EBITDA) increased 20% to US$218.7 million, while adjusted EBITDA margin was at 18%.

Gross profit grew by 15% to US$323.9 million in 2010 while the gross margin was at 27%.

The company's net debt was US$580.2 million as of December 31, 2010. The effective cost of debt was below 3%, the company said.

"The outlook for 2011 is challenging. The operational impact of steep rises in grain and other feedstock input costs will largely be felt in the coming months, and we anticipate that these will only be partially offset by higher pricing," stated Cherkizovo Group CEO Sergei Mikhailov.

"This reflects an unusually weak pricing environment in the last quarter of 2010, despite commodity inflation, partly as a result of short-term oversupply of meat in the market due to destocking by less efficient producers and individual households in response to rising feed costs. Combined with an increased share of poultry imports late in 2010, it has put downward pressure on selling prices, especially for poultry sales in the first quarter of 2011," he also said.