August 4, 2016
 
Cherkizovo Group announces operating results for first half of 2016
 
 

Cherkizovo Group, the largest vertically integrated meat and feed producer in Russia, announces its operating results for the first half of 2016.
 
 

Poultry Division

 

Sales volume in the first half of 2016 increased by 12% year-on-year to 252,351 tonnes of sellable weight from 225,223 tonnes in the first half of 2015. This growth was driven by higher production levels, which resulted from improvements in efficiency, sales of excess inventory and the launch of new poultry houses at the Mosselprom production facility. The average price during the first half of 2016 dropped by 6% year-on-year to RUB90.06/kg (US$1.36) due to oversupply in the market and consumers' falling purchasing power. On a quarter-on-quarter basis, the average price grew by 3% to RUB91.61/kg (US$1.38).

 
 

Pork Division

 

In the first half of 2016, sales volume in the pork division increased by 12% year-on-year to 86,902 tonnes of sellable weight. This was primarily due to a new genetics improvement strategy launched by the management at the beginning of the year to improve pigs' health status and efficiency by increasing livability and weekly farrows. The average price decreased by 18% year-on-year to RUB83.20/kg (US$1.25), while on a quarter-on-quarter basis, it increased by 3% to RUB84.46/kg (US$1.27). The year-on-year drop was a result of Russian consumers' lower purchasing power and an overall increase in pork production across the country, compounded by imports from Brazil.

 
 

Meat Processing Division

 

During the reporting period, sales volume in the meat processing division grew by 26% year-on-year to 102,898 tonnes from 81,755 tonnes in the first half of 2015. This increase resulted from the launch of a pig slaughter plant at the Dankov meat processing plant in the second half of 2015, which boosted both volume and product assortment. In the first half of 2016, the average price fell by 5% year-on-year to RUB164.42/kg (US$2.48) due to non-sausage products from the Dankov meat processing plant having a greater share in sales. On a quarter-on-quarter basis, the average price fell by 1% to RUB163.81/kg (US$2.47).