Cherkizovo, the Russian meat processor, has reported a fall in annual profits on the back of higher costs, despite increased sales.
Group net profit fell 60% to RUB6bn (US$84.6m) and operating profit fell 55% to RUB7.5bn for the year ending 31 December.
Cherkizovo noted higher costs including feed, incubatory eggs and vet supplies as well as higher operating and interest expenses.
Sales, however, rose 12% year-on-year to RUB77bn thanks to higher poultry and meat volumes.
For the year ahead, Cherkizovo said it would be “another challenging year for the Russian economy”.
“Real incomes will continue to come under pressure from external factors which will likely result in lower consumption levels in 2016,” the company said.
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However, Cherkizovo added it would take advantage of the weakness in the Russian rouble to grow the share of its sales made up by exports.
“As we have recently received halal certification and licences to export our poultry products to the UAE, we will prioritise the halal segment and extend our sales to Egypt and Iran. We are also actively pursuing export opportunities in Europe and south-east Asia, where we are engaging with regulators and potential partners.”
Cherkizovo divisional results
- Sales +19% to RUB44.6bn
- Operating income -59% to RUB3.3bn
- Net income -61% to RUB3.5bn
- Sales flat YOY
- Operating income -55% to RUB4bn
- Net income -59% to RUB3.6bn
- Sales +33% to RUB29.2bn
- Operating income increased to RUB1.3bn
- Net income RUB1bn v loss of RUB0.1bn