May 28, 2013

Cherkizovo announces US$0.6 million loss in Q1 2013

Due to high grain prices and low pork prices, Cherkizovo has reported net loss of US$0.6 million for the first quarter of 2013, compared with net income of US$39.8 million in first quarter of 2012.

The company's sales for the quarter increased by 8.3% to US$385 million, compared with US$357.3 million for the same period in the corresponding year. Cherkizovo stated that the first quarter was extremely challenging for all meat manufacturers in Russia.

Grain prices reached high with a peak in February and pork prices continued to decline throughout the quarter and forced the manufacturers to sell hogs below production cost.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) for the quarter decreased by 54% to US$28.4 million, compared with US$62.5 million in 2012.

Sales volumes in the poultry division increased by 6% to 80,370 tonnes of sellable weight compared with 75,866 tonnes in 2012. Sales volumes in the pork division increased by 58% to approximately 35,887 tonnes of live weight, compared to 22,660 tonnes in the previous year.

Sales volumes in the meat processing division increased by 1% to approximately 29,442 tonnes, while sales volumes in the grain division increased by 43% to 8,438 tonnes compared with a year ago volumes.

Net debt at the end of the first quarter totalled US$846.8 million. Total debt was US$884.2 million.