Cherkizovo Group announces operating results for June and the second quarter of 2019

July 10, 2019

Moscow, Russia – July 10, 2019– Cherkizovo Group (MOEX: GCHE), the largest vertically integrated meat producer in Russia, today announces operating results for June and the second quarter of 2019.[1]  

 

Second quarter 2019 highlights:

Chicken: Sales volume of 171.5 thousand tonnes increased by 31% y-o-y, as we launched chicken producing assets acquired in late 2018.Average sales price increase of 8% y-o-y is attributed to a low base effect of early 2018 and improvement in the sales mix on the back of branded offering development.

Turkey: JV Tambov Turkey sales volume of8.9 thousand tonnes declined by 15% y-o-y, as we further accumulated some inventory during late spring. Average sales price increased by 22 % y-o-y due to the expansion of Pava-Pava branded products and an overall strong demand for turkey products.

Pork: Production and sales volume increased by 16% and 18% respectively, compared to 2Q18 on the back of the expansion of the facilities launched in prior periods. Prices declined by 3% compared to 2Q18, due to higher pork supply coming from both domestic producers and imports.

Meat Processing: Sales volume increased by 7%, supported by the significant growth of carcass sales, up 31% y-o-y, which was offset by a decline of sausages and cuts volumes. Average sales price of the segment remained unchanged from a year ago: sausages and cuts prices increased by 5% and 6% respectively, while carcass price declined by 2% y-o-y, in line with live pork prices.

Grain: Due to the seasonal nature of the business, the results of this segment are reported annually to better reflect business performance.

 

Monthly performance

 

June 2019

June 2018

Change % y-o-y

May
2019

Change % m-o-m

Chicken

 

 

 

 

 

Volume sold, thousand tonnes

    56.09  

    42.55  

32%

    56.92  

(1%)

Average price, RUB/kg

101.68  

    98.85  

3%

103.45  

(2%)

Turkey*

 

 

 

 

 

Volume sold, thousand tonnes

      2.95  

      3.70  

(20%)

      2.95  

0%

Average price, RUB/kg

160.26  

137.39  

17%

164.48  

(3%)

Pork**

 

 

 

 

 

Volume produced, thousand tonnes

    21.71  

    17.60  

23%

    21.75  

0%

Volume sold, thousand tonnes

    20.84  

    16.85  

24%

    21.07  

(1%)

Average price, RUB/kg

    92.44  

100.11  

(8%)

    98.18  

(6%)

MeatProcessing

 

 

 

 

 

Volume, thousand tonnes

    19.55  

    19.49  

0%

    20.81  

(6%)

Sausages

      8.46  

      8.88  

(5%)

      8.64  

(2%)

Cuts

      2.78  

      3.06  

(9%)

      3.36  

(17%)

Carcass

      7.12  

      6.61  

8%

      7.75  

(8%)

By-products

      1.19  

      0.94  

27%

      1.06  

12%

Average price, RUB/kg

163.51  

165.72  

(1%)

167.33  

(2%)

Sausages

186.23  

182.37  

2%

185.77  

0%

Cuts

214.13  

196.87  

9%

212.97  

1%

Carcass

137.25  

145.58  

(6%)

143.49  

(4%)

By-products

    40.99  

    47.83  

(14%)

    47.06  

(13%)

Samson***

 

 

 

 

 

Volume sold, thousand tonnes

      1.55  

N/A

-

      1.65  

(6%)

Average price, RUB/kg

202.71  

N/A

-

197.70  

3%

 

 

Quarterly performance

 

2Q
2019

2Q
2018

Change % y-o-y

1Q
2018

Change % q-o-q

Chicken

 

 

 

 

 

Volume sold, thousand tonnes

171.52  

130.98  

31%

151.60  

13%

Average price, RUB/kg

100.34  

    93.12  

8%

103.56  

(3%)

Turkey*

 

 

 

 

 

Volume sold, thousand tonnes

      8.93  

    10.56  

(15%)

      8.22  

9%

Average price, RUB/kg

164.01  

134.36  

22%

177.10  

(7%)

Pork**

 

 

 

 

 

Volume produced, thousand tonnes

    67.04  

    57.65  

16%

    68.13  

(2%)

Volume sold, thousand tonnes

    64.76  

    54.99  

18%

    65.94  

(2%)

Average price, RUB/kg

    95.88  

    98.46  

(3%)

    89.17  

8%

Meat Processing

 

 

 

 

 

Volume, thousand tonnes

    61.47  

    57.47  

7%

    53.56  

15%

Sausages

    25.38  

    26.79  

(5%)

    22.53  

13%

Cuts

      9.49  

    10.22  

(7%)

      7.70  

23%

Carcass

    23.24  

    17.76  

31%

    20.01  

16%

By-products

      3.36  

      2.69  

25%

      3.32  

1%

 

 

 

 

 

 

 

2Q
2019

2Q
2018

Change % y-o-y

1Q
2018

Change % q-o-q

Average price, RUB/kg

165.96  

165.46  

0%

162.85  

2%

Sausages

187.21  

178.07  

5%

193.82  

(3%)

Cuts

211.15  

198.86  

6%

203.30  

4%

Carcass

141.63  

144.23  

(2%)

132.50  

7%

By-products

    46.10  

    53.41  

(14%)

    41.74  

10%

Samson***

 

 

 

 

 

Volume sold, thousand tonnes

      4.80  

N/A

-

      5.03  

(5%)

Average price, RUB/kg

211.87  

N/A

-

201.04  

5%

 

*Volume and prices reported in turkey section represent sales of the Trading Company “Cherkizovo”.

** Difference in the volume produced and volume sold in the pork segment is attributable to retained gilts replacement. Volumes sold include both intercompany and 3rd party sales.

*** Volumes and prices reflecttotal sales of Samson – Food products, an associate company where the Company has 75% interest.

 

For more information please visithttp://www.cherkizovo.com or contact:

 

Investor Relations

Andrei Novikov

Phone: 7 495 6602440 ext 15430

Email: a.novikov@cherkizovo.com

 

Media contacts

Phone: 7 495 6602440

Email:   pr@cherkizovo.com

 


About Cherkizovo Group

Cherkizovo is the largest diversified meat producer in Russia. The Group is a top-3 producer in each of the Russian poultry, pork and processed meat markets.

Cherkizovo encompasses seven chicken manufacturing complexes (as well as the Belaya Ptitsa production complex which we currently operate pursuant to a lease agreement), sixteen pork farms, five meat processing plants (and an additional meat processing plant operated by an equity associate Samson – Food Products) and two slaughter facilities, nine animal feed plants, twelve grain elevators, a land bank of c. 290 thousand ha and a full-cycle turkey production plant in Tambov, owned and operated as a joint venture with Grupo Fuertes, a leading Spanish agriculture and food company.

Due to its vertically-integrated structure, which includes grain growing and storage, feed production, livestock breeding, fattening and slaughtering, and meat processing, alongside a distribution network across Russia, the Group has delivered long-term sales growth and profitability.

 

Cherkizovo Group shares are traded on the Moscow Exchange (MOEX).

 



[1] Volume data is presented before intersegment eliminations and denotes to sales volumes except noted (**).

   All prices in the release are net of sales volume discounts and VAT.