Russian meat firm Cherkizovo has booked an increase in first-quarter sales across all of its business units, although, the company acknowledged that poultry margins had come under pressure.
Sales at its pork business rose 5%, while revenues from its meat processing business increased 8% during the period. Poultry sales saw the strongest gains – up 15% – thanks to the contribution from its new production sites at Bryansk.
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However, the Russian meat group said that poultry margins were squeezed as selling prices failed to keep pace with higher input costs.
Cherkizovo said prices for poultry sales averaged RUB71.07 per kg in the first quarter of 2011 – down 5% on the fourth quarter of last year. The company blamed the decline on a surge in imports which boosted inventories towards the end of last year.
Nevertheless, Cherkizovo said it expects prices to pick up over the coming months amid rising demand and reduced imports.
“In the first quarter of 2011 we witnessed weaker pricing trends in poultry sales resulting from higher imports in the previous period which led to stocking inventories by the producers and lower than expected price inflation despite sharply rising costs,” CEO Sergei Mikhailov said.
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By GlobalData“Looking ahead, we anticipate the pricing environment for our products to recover towards the second half of the year supported by expected growth in meat consumption, reduced imports and rising costs resulting from grain price increases, as well as by a shortage of supply driven by the reduction of stock. Management is confident that the group will continue to focus on providing efficiency increases and delivering against its strategy.”
