Russian meat processor Cherkizovo today (6 March) booked a drop in profits for 2013 as lower pig prices and high grain costs in the first half of the year weighed on earnings.
CEO Sergei Mikhailov admitted 2013 was “challenging” as the group posted a net profit decline of 71% to US$64.5m. Operating profit was down 62% at US$88.7m.
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The top line improved, with sales growing 5% to US$1.6bn.
However, Mikhailov said an easing in grain prices, a fall in the pork supply and government subsidies meant the situation improved in the back half of 2013. He added: “Despite the fact that profitability indexes dropped substantially due to the unfavourable market environment, we are satisfied with the results of the work done in 2013.”
Mikhailov insisted facilities operating at full capacity in 2014 made it possible to sell higher volumes of meat. With a “favourable pricing environment”, he believed Cherkizovo would be able “to regain our business profitability longstanding trend.”
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