December 2, 2011


Cherkizovo posts 18% rise in Q3 net profit


Russia's Cherkizovo, after posting an 18% increase in its third quarter net profit, is expecting the pricing environment to stay supportive for the rest of 2011.


The net profit rose to US$42.6 million in the July-September period from US$35.9 million in the third quarter of 2010, helped by an acquisition, organic development and higher prices, the company said in a Thursday statement.


"We have completed the integration of Mosselprom within the Group's production structure. As a result of the synergy benefits we have received, operational efficiency is increasing in our poultry segment, where we continue to deliver against our large scale capacity increase projects," said Chief Executive Sergei Mikhailov.


Cherkizovo, which bought poultry farmer Mosselprom in May for US$253 million, has been building up poultry production and targeting a 20-25% market share compared with just fewer than 10% now.


It has recently launched a number of new poultry facilities and started construction of an agri-industrial complex which will start production in 2013.


"We are pleased to be returning to normalised profitability levels, offsetting the negative performance at the beginning of the year. Accordingly, management is optimistic that we are on track to meet expectations for the full year," it said.


Adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) increased 32% in the third quarter to US$72.2 million with a 19% EBITDA margin, flat on-year.


Sales increased 32% to stand at US$389.2 million and amounted to US$1.1 billion in the year to the end of September.


Cherkizovo is controlled by businessman Igor Babayev and his family.

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