Cherkizovo posts 54% profit boost in 2009

Meat producer Cherkizovo said Wednesday (March 31) that its net profits shot up 54% in 2009 despite a plunge in retail sales throughout the sector.

Profits rose to US$120.2 million last year, up from US$78.1 million a year ago, the company said in a statement. Sales increased 12% to RUB32.4 billion (US$1.09 billion), up from RUB28.9 billion a year ago.

An increase in efficiency allowed the company to reduce its operational expenses by 20%, the company said, which also contributed to the upturn in net profits. Cherkizovo boosted pork production by 38% to 53,800 tonnes, compared with 39,000 tonnes in 2009, which boosted sales in the segment 24% to US$139.9 million.

Cherkizovo, which currently operates five hog lots, announced last month that it would buy two more piggeries in the Penza and Lipetsk regions from a company owned by Cherkizovo's main shareholders, Igor Babayev and his family. The acquisition is expected to raise pork production by 30%.

Sales of processed meat products fell 10% to 130,000 tonnes, a figure that beat the sector as a whole, which saw a 20% fall in sales, the company said.

Poultry production remained at the same level of 184,300 tonnes in 2009 compared with 2008, while sales decreased 7% to US$470.1 million compared with US$505.2 million in 2008.

Last year, the company expanded the capacity of its poultry farms in Bryansk and Penza, a move that it expects to boost its poultry capacities 40% by 2012.