OJSC CHERKIZOVO GROUP (“the Company” or “the Group”) PRE-CLOSE TRADING UPDATE FOR THE FIRST QUARTER 2009Moscow, Russia – May 14, 2009 – Cherkizovo OJSC (LSE: CHE), one of Russia's leading integrated and diversified meat producers, today issues its trading results for the first quarter of 2009.
Poultry Division
Total sales volumes in the poultry segment in the first quarter of 2009 gained 6% to 41,500 tonnes compared to approximately 44,100 tonnes in the first quarter of 2008.
Prices for Cherkizovo poultry sales increased by 15% from 62.83 rubles per kg in the first quarter of 2008 to 72.05 rubles per kg in the same period of 2009 (excluding VAT). Due to the 40% devaluation of the ruble and related foreign exchange effect, prices in dollar terms decreased by 18% from $2.59 per kg in the first quarter of 2008 to $2.12 per kg in the same period of 2009 (excluding VAT)?.
Pork Division
Sales volumes in the pork division in the first quarter of 2009 remain flat at approximately 10,000 tonnes. As capacity at the new pork farms in Lipetsk and Tambov comes on line, the Company expects production to reach targeted levels.
In the first quarter prices for pork in Russia were strong and increased in ruble terms by 30% from 57.26 rubles per kg in the first quarter of 2008 to 74.61 rubles per kg in the same period of 2009 (excluding VAT). In dollar terms, prices decreased by 7% from $2.36 per kg of live weight in the first quarter of 2008 to $2.20 per kg of live weight in the same period of 2009 (excluding VAT)*.
Meat Processing Division
In the meat processing division the company continued to decrease volumes of lower-priced, lower-margin products, and this together with lower consumption in the regions of Russia due to tough economic conditions affected the performance of the division. Sales volumes were lower, down 16% to approximately 28,400 tonnes in the first quarter of 2009 from approximately 34,000 in the first quarter of 2008.
Average prices increased by 21% from 92.56 rubles in the first quarter of 2008 to 111.57 rubles in the first quarter of 2009 (excluding VAT). Segment prices in dollar terms decreased by 14% from 3.82 in the first quarter of 2008 to $3.29 in the same period of 2009 (excluding VAT)*.
Commenting on the performance Sergei Mikhailov, CEO of Cherkizovo Group said: "Our sales in the first quarter were primarily influenced by seasonal factors as well as the lenting period ahead of Easter in Russia. However, despite the challenging economic conditions, we remain cautiously optimistic about consumption patterns and pricing trends for our products."
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