Cherkizovo Group announces operating results for December, the fourth quarter and full 2019

January 14, 2020

Cherkizovo Group announces operating results for December, the fourth quarter and full 2019

Moscow, Russia – January 14, 2020– Cherkizovo Group (MOEX: GCHE), the largest vertically integrated meat producer in Russia, today announces operating results for December, the fourth quarter and full 2019.[1]  

Fourth quarter 2019 highlights:

Chicken: Sales volume growth of 22% y-o-y is mainly attributed to the full integration of the assets that the Group acquired at the end of 2018. Average sales price declined by 3% y-o-y and 2% q-o-q.

Turkey: JV Tambov Turkey sales volume of 11.2 thousand tonnes increased by 17% y-o-y and 2% compared to the previous quarter. Average sales price of 176 rub/kg declined 6% y-o-y and increased by 10% q-o-q.

Pork: Production and sales volume were higher, compared to both 4Q18 results and the previous quarter, adding 13% and 23 % respectively, as we get additional volumes from the wean-to-finish farms added to our production system. Average sales price declined by 20% y-o-y and 14% q-o-q, as domestic producers ramped up newly built facilities and exacerbated supply.

Meat Processing: Sales volume growth of 12% y-o-y and 5% q-o-q was driven by higher sales volumes of the sausages backed by the heavy marketing campaign and rebranding of our core Cherkizovo brand, that we’ve launched at the end of 2019, as well as higher carcass sales on the back of the higher volumes of market hogs.

Grain (2019 results): Sales volume of 524 thousand tonnes declined by 25% y-o-y, while overall harvest came to 593 thousand tonnes, a 24 % increase y-o-y as we had better results for all major crops in general, and wheat and corn in particular, as we’ve optimized crop rotation and achieved better yields, while marginally increasing crop area.

Monthly performance


December 2019

December 2018

Change % y-o-y

November 2019

Change % m-o-m










Chicken







Volume sold, thousand tonnes

    59.77  

    51.50  

16%

    58.02  

3%


Average price, RUB/kg

110.91  

116.54  

(5%)

108.41  

2%









Turkey*







Volume sold, thousand tonnes

      4.06  

      3.38  

20%

      3.63  

12%


Average price, RUB/kg

179.25  

204.30  

(12%)

177.20  

1%









Pork**







Volume produced, thousand tonnes

    25.55  

    27.32  

(6%)

    27.63  

(8%)


Volume sold, thousand tonnes

    24.63  

    26.42  

(7%)

    26.77  

(8%)


Average price, RUB/kg

    73.27  

    96.86  

(24%)

    79.48  

(8%)










December 2019

December 2018

Change % y-o-y

November 2019

Change % m-o-m



Meat Processing







Volume, thousand tonnes

    22.40  

    20.72  

8%

    21.69  

3%


Sausages

    10.83  

      9.63  

12%

      9.53  

14%


Cuts

      2.61  

      3.02  

(14%)

      2.45  

6%


Carcass

      7.95  

      6.96  

14%

      8.52  

(7%)


By-products

      1.01  

      1.11  

(10%)

      1.18  

(15%)


Average price, RUB/kg

164.74  

185.79  

(11%)

157.97  

4%


Sausages

202.51  

215.03  

(6%)

189.87  

7%


Cuts

208.88  

231.96  

(10%)

210.35  

(1%)


Carcass

113.81  

148.12  

(23%)

121.95  

(7%)


By-products

    46.18  

    42.80  

8%

    51.87  

(11%)









Samson***







Volume sold, thousand tonnes

      2.39  

N/A

-

      2.27  

5%


Average price, RUB/kg

204.55  

N/A

-

195.45  

5%


Quarterly performance


4Q 2019

4Q 2018

Change % y-o-y

3Q 2019

Change % q-o-q










Chicken







Volume sold, thousand tonnes

175.40  

144.35  

22%

164.51  

7%


Average price, RUB/kg

109.05  

112.39  

(3%)

110.81  

(2%)









Turkey*







Volume sold, thousand tonnes

    11.23  

      9.61  

17%

    11.03  

2%


Average price, RUB/kg

176.00  

188.05  

(6%)

160.71  

10%









Pork**







Volume produced, thousand tonnes

    82.24  

    72.72  

13%

    66.76  

23%


Volume sold, thousand tonnes

    79.41  

    70.20  

13%

    64.48  

23%


Average price, RUB/kg

    80.08  

100.61  

(20%)

    93.52  

(14%)









Meat Processing







Volume, thousand tonnes

    66.87  

    59.64  

12%

    63.70  

5%


Sausages

    30.45  

    27.69  

10%

    29.30  

4%


Cuts

      7.91  

      9.02  

(12%)

      6.73  

17%


Carcass

    25.24  

    19.90  

27%

    24.46  

3%


By-products

      3.27  

      3.04  

8%

      3.21  

2%










4Q 2019

4Q 2018

Change % y-o-y

3Q 2019

Change % q-o-q



Average price, RUB/kg

160.66  

180.86  

(11%)

162.56  

(1%)


Sausages

191.48  

201.11  

(5%)

180.12  

6%


Cuts

210.71  

226.08  

(7%)

223.11  

(6%)


Carcass

122.37  

151.69  

(19%)

140.18  

(13%)


By-products

    48.37  

    53.23  

(9%)

    45.75  

6%









Samson***







Volume sold, thousand tonnes

      7.10  

N/A

-

      5.74  

24%


Average price, RUB/kg

200.77  

N/A

-

207.74  

(3%)


Annual performance


2019

2018

Change % y-o-y








Chicken





Volume sold, thousand tonnes

663.02  

544.15  

22%


Average price, RUB/kg

105.98  

    96.89  

9%







Turkey*





Volume sold, thousand tonnes

    39.41  

    39.25  

0%


Average price, RUB/kg

169.23  

147.95  

14%







Pork**





Volume produced, thousand tonnes

284.17  

247.27  

15%


Volume sold, thousand tonnes

274.59  

236.87  

16%


Average price, RUB/kg

    89.14  

    98.20  

(9%)







Meat Processing





Volume, thousand tonnes

245.60  

229.52  

7%


Sausages

107.66  

106.73  

1%


Cuts

    31.82  

    40.33  

(21%)


Carcass

    92.95  

    70.28  

32%


By-products

    13.16  

    12.18  

8%


Average price, RUB/kg

162.96  

169.64  

(4%)


Sausages

187.87  

184.45  

2%


Cuts

211.67  

205.29  

3%


Carcass

134.05  

146.74  

(9%)


By-products

    45.48  

    53.86  

(16%)













2019

2018

Change % y-o-y








Samson***





Volume sold, thousand tonnes

    22.67  

         -    

N/A


Average price, RUB/kg

204.94  

         -    

N/A







Grain****





Volume harvested, thousand tonnes

592.97  

479.73  

24%


Wheat

320.60  

281.55  

14%


Corn

    99.31  

    61.22  

62%


Sunflower

    84.42  

    65.11  

30%


Barley

    38.99  

    27.76  

40%


Soybean

    38.48  

    28.39  

36%


Other

    11.17  

    15.70  

(29%)


Volume sold, thousand tonnes

523.98  

696.09  

(25%)


Wheat

277.12  

349.73  

(21%)


Corn

    94.58  

172.85  

(45%)


Sunflower

    83.41  

    85.96  

(3%)


Barley

    37.93  

    31.18  

22%


Soybean

      6.88  

    25.11  

(73%)


Other

    24.06  

    31.26  

(23%)


Average price, RUB/kg

    11.02  

      9.92  

11%


Wheat

      9.02  

      8.94  

1%


Corn

      8.76  

      6.32  

39%


Sunflower

    17.09  

    17.43  

(2%)


Barley

      8.62  

      9.31  

(7%)


Soybean

    21.58  

    23.27  

(7%)


Other

    22.60  

    10.00  

126%


* 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 reflect total sales of Samson – Food products, an associate company where the Company has 75% interest.

**** Volumes are in dry weight

For more information please visit http://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. 300 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.

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, allows the Group to deliver 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.