Daily analyst comments
Cherkizovo reports production in 9M 2008
19.11.08 10:44
Cherkizovo Group has reported its manufacturing performance for 9M 2008, which we regard as positive. At the same time, we believe that the group’s profit margins will remain under strong downward pressure from mounting expenses.
Cherkizovo Group has reported its production for 9M 2008. The company reported a 13% increase in poultry production and a 61% surge in pig breeding, while meat processing remained at last year’s levels. We expect a substantial rise in the company’s nine-month sales in revenue terms, attributable to favorable price trends on the market. In the reporting period, average sales prices on poultry rose by 19%, pork 30% and meat products 26% in dollar terms.
For all that, we expect a significant downturn in the company’s profit margins over the year-earlier period amid soaring production and raw material costs, blamed on high grain prices.
We currently do not have an official recommendation on Cherkizovo Group shares.