Cherkizovo reports increase in Q3 profit

Russian meat producer Cherkizovo has reported an increase of 18% to $42.6m in its third-quarter net profit, compared to $35.9m year-on-year, aided by a recent acquisition and an increase in its product prices.

Revenue grew 32% to $389.2m in the quarter ended 30 September 2011, while gross profit increased 25% to $100.4m.

Cherkizovo Group CEO Sergey Mikhailov said, despite the challenging operating environment at the beginning of this year, the company has delivered a solid performance across all segments in the first nine months of 2011, in line with the targets.

"Overall, management is optimistic that the group will produce a strong financial performance for the full year in line with our expectations and will further continue to deliver against its strategy," Mikhailov added.

Adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 32% to $72.2m from $54.7, though adjusted EBITDA margin for the period remained the same at 19% as in 2010.

For the first nine months of 2011, revenue grew 24% to $1078.6m from the previous year and gross profit rose 11% to $270.1m, net income however declined marginally to $108.4m.

Segment-wise, total sales in the poultry division for the first nine months jumped by 35% to $504.8m, and sales volumes surged 26% to approximately 185,620t.

The company, which acquired poultry firm Mosselprom in May 2011, has been boosting poultry production and is targeting to capture a market share of 20-25%, compared to the current 10% in the sector.

In the pork division, total sales soared 24% to $196.6m, sales volumes grew 7% to 65,800t of live weight, the meat processing unit saw a 25% increase in total sales to $472m and a 5% rise in sales volumes to 108,420t.

The company invested $81.9m in the pork division, $63.3m in poultry and $7.5m in meat processing in the first nine months of 2011.

Caption: Higher prices for products and an acquistion boost Q3 profit of Russian meat producer Cherkizovo.