July 28, 2014

Cherkizovo Group, Russia's largest meat and fodder producer, announces its operational results for the first half of 2014.

Total sales in the poultry Division for the first half of 2014 increased by 25% on-year to 205,775 tonnes of sellable weight, including 22,562 tonnes of sellable weight produced by LISKO Broiler since acquisition by Cherkizovo Group.

The average selling price in roubles increased by 6% on-year from RUB76.62/kg (US$2.18) in the first half of 2013 to RUB81.53/kg (US$2.32) in the first half of 2014 (all prices hereinafter are net of VAT). The price in the second quarter of 2014 increased by 8% compared to the price of RUB77.93/kg (US$2.22) in the first quarter of 2014.

The average selling price in dollars decreased by 6% on-year from US$2.47/kg in the first half of 2013 to US$2.33/kg in the first half of 2014, due to weakening of the rouble against the USD. The price in the second quarter of 2014 increased by 8% compared to the price of US$2.23/kg in the first quarter of 2014.

Sales in the pork division in the first half of 2014 increased by 16% on-year to 81,318 tonnes live weight, compared to 70,078 tonnes in the first half of 2013.

The average selling price in roubles increased by 50% on-year from RUB59.24/kg (US$1.69) in the first half of 2013 to RUB88.72/kg (US$2.53) in the first half of 2014. The price in the second quarter of 2014 increased by 41% to RUB103.67/kg (US$2.95) compared to the price of RUB73.55/kg (US$2.60) in the first quarter of 2014. The rapid price growth is mainly due to the import restrictions on pork in Russia.

The average selling price in dollars increased by 33% on-year from US$1.91/kg in the first half of 2013 to US$2.54/kg in the first half of 2014 (live weight). The price in the second quarter of 2014 increased by 41% compared to the price of US$2.10/ kg in the first quarter of 2014.

Sales in the meat processing division were almost flat at 64,033 tonnes in the first half of 2014 compared to the corresponding period of 2013 (1H 2013: 63,226 tonnes). 

The average selling price in roubles increased by 10% on-year from RUB146.08/kg (US$4.16) in the first half of 2013 to RUB160.80/kg (US$4.58) in the first half of 2014. The price in the second quarter of 2014 increased by 10% to RUB167.95/kg (US$4.78) compared to the price of RUB152.52/kg (US$4.34) in the first quarter of 2014.

The average selling price in dollars decreased by 2% on-year from US$4.71/kg in the first half of 2013 to US$4.60/kg in the first half of 2014. The price in the second quarter of 2014 increased by 10% compared to the price of US$4.36/kg in the first quarter of 2014.

Sales of various crops in the grain division doubled to 24,618 tonnes in the first half of 2014 compared to 12,149 tonnes in the first half of 2013.

The average selling price in roubles decreased by 28% on-year from RUB8.50/kg (US$0.24) in the first half of 2013 to RUB6.08/kg (US$0.17) in the first half of 2014. The price in the second quarter of 2014 decreased by 2% compared to the price of RUB6.10/kg (US$0.17) in the first quarter of 2014.

The average selling price in dollars decreased by 37% on-year from US$0.27/kg in the first half of 2013 to US$0.17/kg in the first half of 2014. The price in the second quarter of 2014 was flat at US$0.17/kg.

Cherkizovo Group began harvesting in Lipetsk, Orel, and Voronezh Regions in July. The company increased its sown area to about 58,000 hectares in this crop season. Cherkizovo expects to harvest approximately 250,000 tonnes of grain (bunker weight) in 2014.