Cherkizovo reports rise in Q4 2012 profit

Russian meat producer Cherkizovo has reported that its net income for the fourth quarter of 2012 soared 114.5% to $66.5m, compared with $31m in the corresponding quarter last year.

Sales in the quarter increased 11% to $436.3m, compared with $393.3m in the same quarter of fiscal 2011.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) for the quarter increased 17% to $75.4m, compared with $64.6m in the corresponding period of 2011.

For the full-year 2012, Cherkizovo reported a 66% increase in net earnings to $225.2m, compared with $135.9m in 2011, driven by higher sales and cost savings.

The company’s sales for fiscal 2012 increased by 7% to $1.58bn, compared with sales of $1.47bn reported in fiscal 2011.

Cherkizovo posted a 29% rise in EBITDA to $314.6m, compared with $243.4m in 2011.

Cherkizovo chief executive officer Sergey Mikhailov said, "Over many years Cherkizovo Group has invested in growth and development, and in 2012 we saw considerable ‘harvest’ from earlier investments."

Segment-wise, Cherkizovo’s poultry division posted a 22% rise in sales and EBITDA increased by 57%, with the division generating half the revenue and more than half the profit of the company.

The meat processing division reported a 9% increase in EBITDA profitability due to lower input costs and a focus on value-added products, while the pork division volume increased 14%.

As of year-end, Cherkizovo net debt totalled $858.6m.

The company expects fiscal 2013 to be a very challenging year due to high grain prices and low pork prices.

Cherkizovo was formed through the merger of the Cherkizovsky agro-industrial group and the Michailovsky agro-industrial group in 2005 and it is one of the leading manufacturers of poultry, pork and meat products in Russia.

---

Image: Cherkizovo’s meat processing division reported a 9% increase in EBITDA profitability for fiscal 2012, due to lower input costs and a focus on value-added products. Photo courtesy of Cherkizovo Group.