May 9, 2011

 

Cherkizovo posts Q1 update for meat trade

 

 

Cherkizovo OJSC, one of Russia's leading integrated and diversified meat producers, has issued its trading update for the first quarter of 2011, the company said.

 

Poultry Division Sales volumes in the Poultry division in the first quarter of 2011 increased by 15% to approximately 53,570 tonnes of sellable weight, compared to approximately 46,570 tonnes for the first quarter of 2010, reflecting the contribution from the newly launched sites at Bryansk.

 

Prices for poultry sales increased by 5% from US$2.32 per kg in the first quarter of 2010 to US$2.43 per kg in the first quarter of 2011, excluding VAT. Compared to the price in the fourth quarter of 2010 of US$2.45, prices in the first quarter of 2011 were almost flat.

 

Prices in rouble terms increased by 3% from RUB69.20 (US$2.49) per kg in the first quarter of 2010 to RUB71.07 (US$2.56) per kg in the first quarter of 2011, excluding VAT. However, compared to the price in the fourth quarter of 2010 of RUB75.15 (US$2.7) per kg, the price in the first quarter of 2011 decreased by 5%, reflecting pressure from higher inventories caused by a larger share of imports entering Russia in the fourth quarter.

 

Prices in April this year have been on an upward trend, and is expected to continue through the second quarter of the year, given the considerable reduction in poultry import quotas, as well as meat price inflation resulting from rising input costs.

 

Pork Division Sales volumes in the Pork division in the first quarter of 2011 increased by 5% to approximately 20,220 tonnes of live weight, compared to approximately 19,190 tonnes in the first quarter of 2010.

 

In dollar terms, prices for pork sales increased by 12% from US$2.29 per kg of live weight in the first quarter of 2010 to US$2.57 per kg of live weight in the first quarter of 2011, excluding VAT. Compared to the price in the fourth quarter of 2010 of US$2.33 per kg, prices in the first quarter of 2011 increased by 10%.

 

Prices in ruble terms increased by 10% from RUB68.59 (US$2.47) per kg in the first quarter of 2010 to RUB75.27 (US$2.71) per kg in the first quarter of 2011, excluding VAT. Compared to the price in the fourth quarter of 2010 of RUB71.61 (US$2.58) per kg, the price in the first quarter of 2011 increased by 5%. The pricing environment for pork products in Russia at the end of 2010 and beginning of 2011 was negatively affected by a larger than usual reduction of livestock by smaller and less efficient producers and households, and we expect it to recover in the second quarter as the summer season progresses.

 

Meat Processing Division Sales volumes increased by 8% to approximately 33,200 tonnes from 30,790 tonnes for the first quarter of 2010.

 

Prices in dollar terms increased by 13% from US$3.80 per kg in the first quarter of 2010 to US$4.30 per kg in the first quarter of 2011, excluding VAT. Compared to the price in the fourth quarter of 2010 of US$4.08, the price in the first quarter of 2011 increased by 5%.

 

Prices in ruble terms increased by 11% from RUB113.71 (US$4.1) in the first quarter of 2010 to RUB125.75 (US$4.52) per kg in the first quarter of 2011 (excluding VAT). Compared to the price in the fourth quarter of 2010 of RUB125.37 (US$4.51) per kg, the price in the first quarter of 2011 remained flat.

 

Sergei Mikhailov, CEO of Cherkizovo Group said, "We are making solid progress in our large-scale projects to increase poultry capacity, and we are on track to provide significantly higher output from 2011, which is also supported by our recent launch of the second site in Bryansk."