Cherkizovo reports financial results for the first quarter of 2025: revenue growth amid losses

Key points:

• Production: In the first quarter, production volumes increased by 6% compared to last year due to the acquisition of an asset in the Tyumen region and the expansion of capacities in the Altai region. Without taking into account the contribution of the Tyumen site, the growth was 2%. In the Altai region, the expansion of broiler production continues, six new poultry houses have been put into operation, which will increase the annual production of chicken MEAT by 15 thousand tons.
• Sales: The Foodservice channel showed growth of 22% in monetary terms and 20% in kind, which was facilitated by the expansion of cooperation with both small and large catering networks. EXPORT sales increased by 41% in monetary terms and 36% in kind due to the growth of deliveries to the CIS countries, Asia and the Middle East.
• Financial results:  The company's revenue increased by 11%, driven by increased production volumes, optimized distribution channels, and higher prices for pork and turkey. However, lower prices for chicken offset this growth. EBITDA decreased by 9% compared to the same period last year. The combination of high interest expenses and lower EBITDA resulted in a net loss in the first quarter.
• Financing: In March, the company placed ruble bonds for 10 billion rubles and yuan bonds for 500 million with maturities of 1.5 and 2 years, respectively. The funds raised were used to refinance current debt.
• Awards: At the Prodexpo-2025 exhibition, Cherkizovo products received 16 gold medals in the Best Product competition, and the Latifa brand was recognized in the Best Halal Product 2024 competition.

Company comment:

Cherkizovo noted that the decline in prices for poultry products, rising costs and the high cost of borrowed capital had a negative impact on financial results. The company plans to focus on developing sales of branded products, the Foodservice and Export channels, as well as optimizing costs and increasing production efficiency.

Financial indicators:

Factors that influenced the results:

• Increase in production costs due to higher prices for grain, hatching eggs and personnel.
• Chicken prices fell 6.4%, while pork and turkey prices rose 9.2% and 12.8%, respectively.
• Net interest expenses more than doubled to 4.8 billion roubles.
• Investments fell by 22.1% due to the high cost of borrowed capital.

Plans for the future:

Cherkizovo plans to focus on increasing sales of high-value-added products from turkey and pork, developing the Foodservice and Export channels, as well as optimizing costs and increasing production efficiency. The company also intends to implement an integrated solution based on 1C:ERP to improve the efficiency of all business segments.

Key findings:

Cherkizovo Group faced financial difficulties in the first quarter of 2025, despite the growth of production and revenue. The main reasons for the losses were the increase in cost price, high interest expenses and the decrease in prices for chicken meat. The company plans to take measures to improve financial performance, focusing on the development of promising areas and cost optimization.