Cherkizovo Group announces Interim Results for the six months ended June 30, 2006
Interim Results for the six months ended June 30, 2006
Highlights
Financial
- Net income increased 39% year-on-year to US $3.7 million (2005: US $2.7m)
- Adjusted EBITDA* increased 22% year-on-year to US $30.4 million (2005: US $24.9m)
- Adjusted EBITDA* margin increased year-on-year from 10% to 11%
- Gross Profit increased 21% to US $62.9 million (2005: US $51.8m)
- Gross margin increased to 22% (2005: 20%)
- Turnover up 9% to US $283.4 million (2005: US $260.0m)
Business
- Successful IPO and subsequent listing on the London Stock Exchange and Moscow's RTS
- Margin improvement through a combination of measures focused on efficiency gains and revenue maximization in all three divisions
- State of the art Tambov pork production complex construction unveiled and project financing secured
- Successful 5-year Rouble bond placement with a coupon of 8.85%, one of the lowest rates in the industry
- Extensive trading house modernization and expansion program underway, with new or completely overhauled facilities in Ufa, St Petersburg, Saratov, Samara and Ekaterinburg
- Divisional management strengthened with appointments of new COO and Poultry Division Manager
- Introduction of Oracle ERP system
Sergey Mikhailov, Chief Executive Officer of Cherkizovo Group, said
"It has been a strong first half of the year for the company in which we successfully listed the business on the London Stock Exchange. In the period we have delivered a good financial performance and increased our margins across all three divisions.
"In particular I am pleased that the company was able to operate well through a challenging time for our industry as a result of avian flu. In fact, despite these difficulties, in the first half we increased tons of poultry produced by 20% while reducing our production costs. At the moment, we are observing steady gains in poultry prices and we expect this trend to continue.
"In the pork division, the company realized an impressive 30% EBITDA margin. We expect to see further productivity gains in this division in a strong demand environment as we continue to roll out new, high-efficiency facilities such as those in Lipetsk and Tambov.
"I am pleased with our performance and achievements in the period. We continue to drive organic growth while seeking consolidation opportunities that will increase the value of the business. The Board remain confident in the long term prospects for our business."
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