August 16, 2011

Cherkizovo anticipates to receive US$19 million state subsidies

Cherkizovo Group, a major Russian meat producer, is anticipating to receive state subsidies totalling about RUB550 million (US$19 million) for the production of poultry and pork.

Payments will come to RUB382 million (US$13.30 million) for poultry output and about RUB168 million (US$5.85 million) for making pork, Cherkizovo Group said. The subsidies are part of grants to regional budgets totalling RUB9 billion (US$313 million) that the government plans to allot this year, it said.

"If the company gets the expected amount of subsidies, its forecasted consolidated Ebitda will add 8% and forecasted net profit will gain 13% in 2011," said Natalia Zagvozdina, an analyst at Renaissance Capital in Moscow. The subsidies "flow directly to the company's profit," she said.