Russia's biggest vertically-integrated meat producer, Cherkizovo Group, has reported a net adjusted profit of RUB 3.4 billion (€45 million) in the third quarter of its financial year, up from RUB 1.6 billion (€21 million) for the same period in 2017.
Last week, the group announced its results for the period ending 30 September 2018.
Adjusted EBITDA for the period was up 65.4% year-on-year to RUB 6 billion (€80 million), while net operating cash flow decreased 23.4% to RUB 2.6 billion (€35 million).
Growth was driven by higher revenue across segments, improved performance in the grain segment, and the incorporation of a number of operational improvements.
'Strong Performance'
The CEO of Cherkizovo, Sergei Mikhailov, said, “Our strong performance in the third quarter and year-to-date has demonstrated the Groups’ ability to leverage market-leading positions and deliver strong operational and financial results.
“The focus on the domestic market, where prices hit bottom at the beginning of the year and gradually moved up as we progressed into the second half, was well rewarded with all segments recording significant profitability growth.”
The meat producer’s net adjusted profit for the first nine months of the year was up 4.4% to RUB 5.9 billion, from RUB 5.7 billion a year ago.
Adjusted EBITDA increased by 9.2% to RUB 13.0 billion, and the net operating cash flow decreased by 25.0% to RUB 7.4 billion.
Q3 Highlights
In its third quarter, the company launched two wean-to-finish facilities, which will boost the meat producer’s pork production capacity.
In July of this year, the company proposed to acquire poultry producer Altaisky Broiler in the Siberian Federal District, with the aim to expand its footprint into a new region.
In the same month, it also launched a fully automated robotic meat processing plant in Kashira in the Moscow Region.
In September of this year, shareholders of the company approved the distribution of profits for H1 2018 in the form of dividends, amounting to RUB 900 million.
Outlook
The Cherkizovo Group is optimistic in its outlook for the rest of the year and beyond.
It said that will focus on growing its business organically, as well as through selective mergers and acquisitions that are in line with its strategic goals.
The meat producer expects organic growth from the ongoing green-field development in its pork and meat processing segments.
It will also optimise favourable market conditions to gain market share in high value-added niches for branded products, while simultaneously exercising a rigorous cost control at all stages of production.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Dayeeta Das. Click subscribe to sign up to ESM: European Supermarket Magazine.
