OREANDA-NEWS. November 07, 2012. Cherkizovo OJSC (LSE: CHE), Russia's leading integrated and diversified meat producer, issues a trading update for the first nine months of 2012, reported the press-centre of Cherkizovo Group.  

Poultry Division
Sales volumes in the Poultry division for the first nine months of 2012 increased by a robust 27% to approximately 236,080 tonnes of sellable weight compared to 185,620 tonnes for the first nine months of 2011, reflecting organic volumes added in the Penza and Bryansk clusters and sales by Mosselprom, which was acquired in May 2011 and now is fully integrated.

Prices in rouble terms increased by 6% from 72.40 RUR/kg for the first nine months of 2011 to 76.43 RUR/kg in the first nine months of 2012 (excluding VAT). Compared to the second quarter of 2012, the price in the third quarter increased 10% to 82.19 RUR/kg. 

Prices for poultry sales in dollar terms decreased by 2% from USD 2.52/kg for the first nine months of 2011 to USD2.46/kg for the first nine months of 2012 (excluding VAT), due to rouble weakening. Compared to the second quarter of 2012, the price in the third quarter increased by 7% to USD 2.57/kg.

Pork Division
Sales volumes in the Pork division for the first nine months of 2012 increased by 7% to approximately 70,131 tonnes of live weight, compared to 65,800 tonnes for the first nine months of 2011. 

Prices in rouble terms increased by 4% from 78.90 RUR/kg for the first nine months of 2011 to 81.85 RUR/kg for the first nine months of 2012 (excluding VAT). Compared to the price in the second quarter of 2012, the price in the third quarter increased by 1% to 82.91 RUR/kg. 

In dollar terms, prices for pork sales decreased by 4% from USD 2.74/kg of live weight for the first nine months of 2011 to USD 2.63/kg of live weight for the same period of 2012 (excluding VAT)*, due to rouble weakening. Compared to the second quarter of 2012, the price in the third quarter decreased by 2% to \\$2.59/kg.

Meat Processing Division
Sales volumes in the Meat Processing Division decreased by 13% to approximately 94,049 tonnes for the first nine months of 2012 from 108,420 tonnes for the first nine months of 2011, due to the closure of an inefficient slaughtering facility in southern Russia and a change in the product mix towards higher margin processed products.

Prices in rouble terms increased by 12% from 130.56 RUR/kg for the first nine months of 2011 to 146.49 RUR/kg for the first nine months of 2012 (excluding VAT). Compared to the price in the second quarter, the price in the third quarter of 2012 increased by 5% to 151.11 RUR/kg.

Prices in dollar terms increased by 4% from USD4.54/kg for the first nine months of 2011 to USD4.71/kg for the first nine months of 2012 (excluding VAT). Compared to the second quarter of 2012, the price in the third quarter increased by 1% to USD4.72/kg.

2012 crop harvest
Cherkizovo Group’s farming division reported a 2012 crop harvest of approximately 103,000 tonnes of agricultural products, to date. The Company cultivated approximately 35 000 hectares in Voronezh and Orel regions. The 2012 harvest includes wheat (approx. 54 000 tonnes), barley (approx. 18 000 tonnes), sunflower (approx. 12 500 tonnes) and others (peas, corn, soya).

 About Cherkizovo Group
 Cherkizovo Group (LSE:CHE) is the largest meat manufacturer in Russia and one of the top three companies serving Russia’s poultry, pork and meat processing markets.  The company is also Russia’s largest producer of fodder.  

 The Group includes 7 full cycle poultry production facilities, with a total capacity of 400,000 tonnes live weight p.a.; 14 modern pork production facilities with a total capacity of 180,000 tonnes live weight p.a.; 6 meat processing plants with a total capacity of 190,000 tons p.a.; 6 fodder plants with a total capacity of 1.4 million tonnes p.a.; grain storage facilities with a total storage capacity exceeding 500,000 tonnes; and a land bank exceeding 100,000 hectares. In 2012, Cherkizovo expects to produce more than half a million tonnes of meat and processed meat products.

Due to its vertically integrated structure, which includes agricultural land, grain storage facilities, feed production, livestock breeding, growing and slaughtering as well as meat processing and integrated distribution, Cherkizovo has consistently delivered sustainable revenue and profit growth. In 2011, Cherkizovo’s US GAAP consolidated revenue increased 24% to USD 1 473 million, and net profit amounted to USD 147.8 million.

Within the last five years alone, Cherkizovo has invested more than USD 1 billion into the development of Russia’s agriculture sector. In addition to existing production facilities, the Group is also investing in a 20 billion rouble hi-technology agro-industrial production complex in Elets, Lipetsk region. 

Cherkizovo’s strategy includes both organic growth and investment in new projects, driving the consolidation of the Russian meat market. Cherkizovo shares are quoted on LSE and RTS/MICEX.