Russian meat manufacturer Cherkizovo Group has seen operating profit halve during the first quarter as margins were hit by “historically high” grain costs and declining pork prices.
Cherkizovo said this morning (24 May) adjusted EBITDA fell 54% in the three months to the end of March, dropping to US$28.4m. Operating margin slid to 7.4%, down from 17.5% in the comparable period of last year.
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Margins were hit by high grain prices, which peaked in February, the company said. This came at a time of declining pork prices which forced “even the most efficient” pork producers in Russia to sell hogs at below the cost of production.
Nevertheless, the company was able to book an 8% increase in turnover, which grew to $385m on higher volumes.
The group racked up a net loss of $0.6m, down from an income of $39.8m last year.
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