Cherkizovo net income up 46 percent first half 2012

Cherkizovo Group reported a net income of $96.3 million for the first half of 2012, up 46 percent from the $66.2 million reported in the first half of 2011, according to the company's latest financial report.
Net income for the second quarter alone reached $56.9 million, up 17 percent from 2011's $48.5 million. The company's poultry segment saw sales grow by one third and profits double, according to CEO Sergey Mikhailov. "This success was achieved by both organic sales and the contribution of Mosselprom, which was acquired in May 2011 and is now fully integrated," said Mikhailov. "Post integration, Cherkizovo has been able to substantially improve Mosselprom’s profitability and operating efficiency. Both low prices for grain at the beginning of the year and the Group’s flexible purchasing strategy helped to decrease the cost of goods."
Cherkizovo expanded in the first half of the year, opening the first line of its poultry breeding facility, “Pervomayskaya,” at the Bryansk cluster. The facility, which was built as part of Cherkizovo’s ongoing poultry capacity increase project, consists of 28 bird houses, with a combined capacity of almost 1 million broilers. The company also built 21 additional bird houses at the poultry breeding facility “Vostochnaya” part of the Penza cluster. Previously, this facility consisted of four bird houses with a capacity of 246,000 broilers, but with the new bird houses, this has increased to 1 million heads.

"In terms of the general outlook for the agricultural sector, we are broadly optimistic about government actions aimed to support the industry," said Mikhailov. "Following [World Trade Organization] accession, the government is considering prolonging the zero profit tax rate for an unlimited period of time for agricultural manufacturers. Meanwhile, the subsidies on interest rates are being maintained. Such measures will help agricultural businesses achieve their long term development goals, while consumers will benefit from high quality, domestic produce.”