Cherkizovo today (30 November) booked a 26% rise in nine-month earnings but the Russian meat processor’s profits slowed due to “tighter” poultry and pork prices.
The London-listed group posted net income of US$104.4m for the nine months until the end of September. On a rouble-currency basis, net income was up 17%.
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However, Cherkizovo’s first-half profits were up 42% in dollars and 29% in roubles and CEO Sergey Mikhailov said “tighter” poultry and pork prices had weighed on the result.
“Our results were affected by the tighter pricing environment in the poultry and pork divisions, particularly towards the end of the third quarter and we expect pricing trends to remain challenging throughout the fourth quarter of 2010 and rolling over into the first quarter of 2011,” Mikhailov said.
“We are now witnessing a slight oversupply of meat in the market, as less efficient producers and individual households are slaughtering livestock due to grain shortage. Combined with an increased share of poultry imports in the second half of this year, this puts a downward pressure on selling prices, especially for poultry sales. This may continue into the beginning of 2011, as producers will accumulate stocks. In the medium term reduction of livestock will potentially lead to more aggressive meat price inflation in 2011.”
Cherkizovo’s revenue rose 20% to $877.7m over the first nine months of the year thanks, it said, to “strong” volume growth across its business.
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