|
16.11.2016 09:00:01
|
DGAP-UK-Regulatory: Cherkizovo Group PJSC (spons. GDR)
EQS-Regulatory: Cherkizovo Group: Announces financial results for the third quarter and nine months of 2016
Moscow, Russia - November 16, 2016 - Cherkizovo Group (LSE: CHE; MOEX: GCHE) (hereinafter 'Cherkizovo', 'the Group' or 'the Company'), the largest vertically integrated meat and feed producer in Russia, today announces its unaudited consolidated IFRS results for the period ending September 30, 2016.
Third quarter financial highlights
- Net revenue came in at RUB 20.4 billion, was flat quarter-on-quarter or increase of 3% from RUB 19.8 billion vs. 3Q of 2015;
- Gross profit decreased by 4% to RUB 4.9 billion from RUB 5.1 billion in 2Q and increased by 61% from RUB 3.0 billion in 3Q 2015;
- Gross margin of 24.0% vs. 25.0% in 2Q 2016 and 15.3% in 3Q 2015;
- Operating expenses fell by 6% quarter-on-quarter to RUB 3.1 billion from RUB 3.3 billion in 2Q 2016 and increased by 9% from RUB 2.8 billion in 3Q 2015;
- Adjusted EBITDA* was 31% higher quarter-on-quarter and reached RUB 2.6 billion, compared to RUB 2.0 billion in 2Q 2016 and 24% lower from RUB 3.5 billion in the third quarter 2015;
- Adjusted EBITDA Margin of 12.8% compared to 9.9% in 2Q 2016 and 17.4% in 3Q 2015.
Nine months financial highlights
- Net revenue increased by 6% year-on-year to RUB 59.2 billion from RUB 56.0 billion in the corresponding period of 2015;
- Gross profit decreased by 11% year-on-year to RUB 13.0 billion, compared to RUB 14.6 billion in 9M of 2015;
- Gross margin fell to 22.0% from 26.1% in 9M 2015;
- Operating expenses grew by 16% year-on-year to RUB 9.5 billion, compared to RUB 8.2 billion in 9M of 2015;
- Adjusted EBITDA* of RUB 5.3 billion, compared to RUB 9.9 billion in the corresponding period of last year, a year-on-year drop of 46%;
- Adjusted EBITDA margin of 9.0%, compared to 17.7% in the first nine months of 2015;
- Net profit for the period was RUB 2.2 billion, down 60% year-on-year from RUB 5.4 billion in 9M 2015;
- Net operating cash flow for the period was RUB 5.1 billion compared to RUB 5.4 billion in 9M 2015;
- Net debt** was RUB 38.4 billion as of September 30, 2016 compared to RUB 30.7 billion as of September 30, 2015;
- The effective cost of debt was 6.1% (vs. 9M 2015 of 3.2%);
- Earnings per share of RUB 50.0 (in 9M 2015 EPS was RUB 123.4).
Key corporate highlights for the third quarter
- The first cluster of the new parent stock breeding farm was completed in Elets (Lipetsk region), which is a key step towards import substitution and the Group ultimately achieving self-sufficiency in hatching eggs;
- The slaughter facility at Tambov Turkey was launched at the end of September. First shipments of turkey products to retail chains will begin at the end of November;
- Cherkizovo Group started exporting poultry meat to Tanzania. The first shipments began in mid-August and are expected to reach 500 tons by the year-end;
- Cherkizovo Group implemented the SAP ERP solution on the HANA platform at the Petelino Trading House. The project was launched simultaneously across 14 sites and provides a centralised platform to help streamline operations and improve efficiency.
Sergei Mikhailov, the CEO of Cherkizovo Group, commented:
'We continued to see stronger financial performance during the third quarter, particularly in the meat processing segment, which delivered year- on-year EBITDA growth of 38%. The uptick we have seen over the last two quarters has been partially driven by many improvements we have made in operational efficiency. The markets we operate in are also showing tentative signs of recovery, with the stabilisation of both pork and poultry prices carrying through to the third quarter.
'While the broader economic recovery in Russia remains fragile for now, Cherkizovo Group continues to follow its diversification strategy by focusing on the value-added products, improving operational efficiency and further expanding into international markets. We have recently received permission to export our poultry products to the EU, which is a significant step forward in building our future export portfolio. With the progress that we are making in expanding exports and our strong and growing market position in Russia, we are well-positioned to capture future growth opportunities both domestically and internationally and have redoubled our efforts to achieve operational and working capital efficiencies and continue to deliver improved profitability and cash flow results.'
Financial summary
9M 16 9M 15 Year-on- 3Q 16 2Q 16 Quarter-on-quarter year change change mln RUB mln RUB % mln RUB mln RUB % Revenue 59,226. 56,018. 6% 20,391. 20,290. 0% 0 8 1 1 Gross 13,034. 14,617. (11%) 4,889.9 5,069.9 (4%) profit 0 5 Operat- (9,454. (8,182. 16% (3,083. (3,275. (6%) ing 6) 5) 3) 9) expens- es Adjust- 5,345.6 9,910.3 (46%) 2,617.9 2,002.3 31% ed EBITDA Adjust- 9.0% 17.7% 12.8% 9.9% ed EBITDA margin Operat- 3,579.4 6,434.9 (44%) 1,806.6 1,794.0 1% ing profit / (loss) Income 2,273.2 5,479.4 (59%) 1,326.8 1,438.9 (8%) / (Loss) before tax Profit 2,191.7 5,411.9 (60%) 1,242.9 1,389.7 (11%) / (loss) Net 5,065.6 5,409.4 (6%) 3,991.4 2,405.0 66% operat- ing cash flow Net 38,366. 35,009. 10% 38,366. 39,250. (2%) debt 9 61 9 6
1 as of December 31, 2015
Revenue
Net sales increased by 6% year-on-year in the nine months of 2016 to RUB 59.2 billion, compared to RUB 56.0 billion in the corresponding period of 2015. The main drivers behind this growth were the poultry and meat processing segments. In the third quarter sales growth was flat at RUB 20.4 billion.
Gross Profit
Gross profit fell by 11% year-on-year to RUB 13.0 billion from RUB 14.6 billion in the nine months of 2015. The majority of this decrease can be attributed to the poultry and pork segments, where a significant share of expenses is pegged to foreign currency. As a result of higher costs, the gross margin consequently fell to 22.0% in the nine months of 2016 from 26.1% in the corresponding period of 2015. In the third quarter gross profit decreased by 4% quarter-on-quarter to RUB 4.9 billion, compared to RUB 5.1 billion in the second quarter of 2016.
Operating Expenses
Operating expenses increased by 16% year-on-year to RUB 9.5 billion, compared to RUB 8.2 billion in the nine months of 2015, as a result of higher payroll, taxes (transportation, property) and other selling expenses. In the third quarter, however, operating expenses fell by 6% quarter-on-quarter to RUB 3.1 billion. Operating Expenses as percentage of sales increased to 16.0% in the nine months of 2016 from 14.6% in the corresponding period of last year.
Adjusted EBITDA
In the first nine months of 2016, adjusted EBITDA fell by 46% year-on-year to RUB 5.3 billion from RUB 9.9 billion in the corresponding period of 2015. The adjusted EBITDA margin fell to 9.0% in 9M 2016. Nonetheless, in the third quarter of 2016, EBITDA demonstrated growth of 31% and reached RUB 2.6 billion (2Q 2016: RUB 2.0 billion).
Interest Expense
Interest expense was up 28% year-on-year to RUB 3.5 billion in the nine months of 2016. The main drivers behind the increase were a 23% year-on- year increase in total loan portfolio to RUB 40.0 billion (9M 2015: RUB 32.5 billion), as well as a rise in bank's interest rates. Net interest expense for 9M 2016 was RUB 1.9 billion, up 126% from the 2015 level of RUB 0.9 billion. The Group accrued RUB 1.5 billion of subsidies in the nine months of 2016 included in the net interest expense above, a year-on-year decrease of 17%.
Net Profit
Net profit for the Group came in at RUB 2.2 billion, a decrease of 60% year-on-year from RUB 5.4 billion in the nine months of 2015. The Net Profit margin fell to 3.7% from 9.7% in the nine months of 2015.
Cash Flow
Net operating cash flow for nine months of 2016 was RUB 5.1 billion, compared with RUB 5.4 billion in the nine months of 2015. This was mostly the result of decreasing operating income.
Business segments
Divisio- Sales Sales Year-on-year Reven- Reven- Year-on- Share ns volume volume change ue ue year of 9M 9M % 9M 9M change Group 2016, 2015, 2016, 2015, % reve- thous- thous- RUB# RUB# nue and and mln mln % tons tons
Poultry 372.1 341.4 9% 34,453 32,058 7% 51% .2 .9 Pork 131.6 123.5 7% 11,171 12,682 (12%) 16% .3 .0 Meat 158.6 135.2 17% 22,818 20,842 9% 33% process- .5 .7 ing
# Includes intersegment sales
Poultry Division
Sales volume in the first nine months of 2016 increased by 9% year-on-year to 372,070 tons of sellable weight, from 341,370 tons in the corresponding period of 2015. This growth was driven by higher production levels, which resulted from improvements in efficiency, sales of excess inventory and the launch of new poultry houses at the Mosselprom production facility. In the third quarter of 2016, sales volume decreased by 4% quarter-on-quarter to 119,720 tons of sellable weight. This was a result of the Lipetsk Chicken Kingdom poultry production facility shifting to produce halal products, which weigh less than the non-halal equivalents, for exports.
The average price during the first nine months of 2016 dropped by 3% year- on-year to 92.26 RUB/kg [1] due to the market's remaining on the back of consumers' falling purchasing power. On a quarter-on-quarter basis, the average price grew by 6% to 96.89 RUB/kg.
Total sales for the division increased 7% year-on-year to RUB 34.5 billion (9M 2015: RUB 32.1 billion). Sales increased 1% quarter-on-quarter and reached RUB 11.6 billion (2Q 2016: RUB 11.5 billion)
Gross profit fell by 19% year-on-year to RUB 4.9 billion from RUB 6.1 billion in the first nine months of 2015 as costs for feed components, hatching eggs and veterinary supplies are denominated in foreign currency. The negative effect was mostly evident in the first quarter of the year when the Russian ruble hit a new historical low. Even though the currency exchange situation has stabilised since then, the average real exchange rate for the first nine months of 2016 was still 15% lower year-on-year. The gross margin for 9M 2016 decreased to 14.3% from 18.9% in the corresponding period of 2015. Between the second and third quarter of 2016, the segment's gross profit has delivered growth of 26%.
Operating expenses as a percentage of sales were 10.9% for the first nine months of the year (9M 2015: 11.3%).
Operating income fell by 52% year-on-year to RUB 1.2 billion from RUB 2.5 billion in the first nine months of 2015, while operating margin fell to 3.4% from 7.7% in the corresponding period of last year. Net profit for the division came in at RUB 0.3 billion, a year-on-year drop of 90%. This was mainly a result of the costs of feed components and other direct materials being pegged to foreign currencies.
Adjusted EBITDA dropped 48% year-on-year to RUB 2.2 billion (9M 2015: RUB 4.2 billion), while the adjusted EBITDA margin fell to 6.3% from 13.0% in the first nine months of 2015. However, on a quarter-on-quarter basis, EBITDA grew by 47% in the third quarter and reached RUB 1.2 billion (2Q 2016: RUB 0.8 billion).
Pork Division
In the first nine months of 2016, sales volume in the pork division increased by 7% year-on-year to 131,581 tons of sellable weight. This was primarily due to a new genetics improvement strategy launched by the management at the beginning of the year to improve pigs' health status and efficiency by increasing livability and weekly farrows. Meanwhile, on a quarter-on-quarter basis, sales volume fell by 4% to 44,679 tons as improvements in production levels and the genetics strategy outpaced the growth of available finishing space.
In 9M 2016, the average price decreased by 16% year-on-year to 86.59 RUB/ kg, while on a quarter-on-quarter basis, it increased by 10% to 93.19 RUB/ kg. The year-on-year drop was a result of Russian consumers' lower purchasing power and an overall increase in pork production across the country. The quarter-on-quarter improvement was due to an outbreak of ASF along with a steady decline of imports, which begun in June.
Total sales in the pork division fell 12% year-on-year to RUB 11.2 billion (9M 2015: RUB 12.7 billion). This dip in sales was expected as the average price fell by 16% year-on-year. On a quarter-on-quarter basis, however, sales increased by 5% and reached RUB 4.1 billion (2Q 2016: RUB 3.9 billion).
Gross profit for the nine months of 2016 stood at RUB 3.3 billion, a year- on-year drop of 14%, due to feed components and medication costs being denominated in foreign currencies. The segment's gross margin fell to 29.8% from 30.5% in 9M 2015. Nonetheless, the pork segment's gross profit increased by 21% between the second and third quarter of 2016.
Operating expenses as a percentage of sales were slightly higher compared to the corresponding period of last year and stood at 4.9% (9M 2015: 3.3%). Transportation tax was the main driver of the expense growth.
Operating income fell by 19% year-on-year to RUB 2.8 billion from RUB 3.5 billion in the nine months of 2015. The operating margin dropped to 24.9% from 27.2% the corresponding period last year. Net profit decreased by 25% year-on-year to RUB 2.4 billion (9M 2015: RUB 3.2 billion).
Adjusted EBITDA decreased to RUB 2.5 billion, a year-on-year decrease of 54%. The adjusted EBITDA margin fell to 22.1% in the nine months of 2016 from 42.4% in 9M 2015. On a quarter-on-quarter basis, adjusted EBITDA demonstrated growth of 44%.
Meat Processing Division
During 9M 2016, sales volume in the meat processing division grew by 17% year-on-year to 158,647 tons from 135,247 tons in the nine months of 2015. This increase was the result of the launch of a new pig slaughter facility at the Dankov meat processing plant in the second half of 2015, which boosted both volume and product assortment. On a quarter-on-quarter basis, sales volume increased by 3% in the third quarter to 55,749 tons.
In the nine months of 2016, the average price fell by 4% year-on-year to 166.91 RUB/kg due to non-sausage products from the Dankov meat processing plant representing a greater share of sales. The average price increased by 5% quarter-on-quarter to 171.49 RUB/kg due to higher demand for sausages and B2B/B2C products in the third quarter.
Total sales were 9% higher in the nine months of 2016 and reached RUB 22.8 billion (9M 2015: RUB 20.8 billion). In the third quarter, sales grew by 6% quarter-on-quarter.
Gross profit for the nine months of the year increased 29% year-on-year to RUB 3.9 billion, compared to RUB 3.0 billion in the corresponding period of 2015. The gross margin rose to 17.1% from 14.4% in the nine months of 2015. On a quarter-on-quarter basis, gross profit remained flat.
In the first nine months of 2016, operating expenses as a percentage of sales grew slightly to 11.9%, compared to 10.4% in the corresponding period of 2015. This was a result of higher transportation and payroll expenses.
In 9M 2016, operating income increased by 39% year-on-year to RUB 1.2 billion from RUB 0.8 billion in 9M 2015. The operating margin rose to 5.1% from 4.1% in 9M 2015. In the nine months of 2016, the meat processing segment generated net profit of RUB 1.1 billion, almost twice that of the corresponding period of 2015 (RUB 0.6 billion).
In the nine months of 2016, adjusted EBITDA demonstrated growth of 38% and reached RUB 1.6 billion (9M 2015: RUB 1.2 billion). The adjusted EBITDA margin reached 7.2% in 9M 2016, compared to 5.7% in 9M 2015. Adjusted EBITDA growth decreased by 12% on a quarter-on-quarter basis to RUB 0.6 billion.
Grain Division
Cherkizovo has begun its 2016 harvesting campaign and Russian harvests are expected to reach record levels this year. The Group expects to harvest a total of 500,000 tons of crops this year; wheat yields have already exceeded the budget.
Due to the seasonality of this business, the results of this segment are reported annually to better reflect the business performance and provide the appropriate basis for comparison.
Financial Position
The Group's capital expenditure on the property, plants, equipment and maintenance amounted to RUB 7.4 billion in the nine months of 2016, a year- on-year decrease of 8%. Of that, RUB 2.4 billion was invested into the poultry division, primarily into the construction of the hatchery and grain storage facility in the Lipetsk region (Eletsprom Project). In the pork division, RUB 2.3 billion was invested into purchasing equipment for the new finisher complexes in the Voronezh region, as well as constructing new finisher complexes in the Lipetsk region. The meat processing division received RUB 1.2 billion of investments for the construction of the Kashira meat processing plant in the Moscow Region. In the grain division, RUB 1.1 billion was invested into the construction of a new grain drying facility. Cherkizovo Group has also invested RUB 0.6 billion into the Tambov Turkey project.
As of 30 September, 2016, Net Debt amounted to RUB 38.4 billion, compared to RUB 35.0 billion at the end of 2015. Total debt was at RUB 40.0 billion as of 30 September 2016, a decrease of 3% from the end of 2015. As of 30 September 2016, long-term debt represented 39% of the debt portfolio and was RUB 15.8 billion. Short-term debt stood at RUB 24.3 billion, or 61% of the portfolio. The effective cost of debt was 6.1% in the nine months of 2016 (9M 2015: 3.2%). Subsidised loans and credit lines made up 77% of the debt portfolio in the nine months of 2016 (9M 2015: 86%). Cash and cash equivalents totalled RUB 1.0 billion as of 30 September, 2016.
Subsidies
In the first nine months of 2016, the Group accrued subsidies for interest reimbursement of RUB 1.5 billion, which offset interest expense (9M 2015: RUB 1.9 billion). The Group received RUB 1.1 billion of subsidies in 9M 2016, compared to RUB 1.4 billion in 9M 2015.
2016 Outlook
The third quarter has brought stability to the meat sales and pricing environment, which continues to improve as meat consumption in Russia shows some signs of growth. Both pork and poultry prices have also bottomed out and the Group expects this improving trend to continue in the fourth quarter this year. However, it is still too early to assess whether this positive trend will carry forward into next year.
The Group's export strategy is making a good progress as its shipments to Tanzania and Egypt have begun, and permission to export poultry products to the EU has also been granted. By the end of the year, Cherkizovo will start exporting poultry to Angola. The Group's total export volume is expected to reach 10,000 tons in the fourth quarter of 2016.
On the domestic market, the Tambov Turkey project is now fully operational with first shipments of turkey products set to begin in the fourth quarter of the year. In 2017, the facility will reach its full production capacity of 50,000 tons of turkey meat, which will position the Company as one of Russia's top turkey producers.
For the full year, the Company expects production and revenue growth across all segments, although the margins will be lower than last year following a challenging first quarter.
For more information please visit www.cherkizovo.com or contact
Cherkizovo Group
Dmitry Yakovlev IR Manager +7 (495) 660 2440 ext. 15962 d.yakovlev@cherkizovo.com
FTI Consulting
Anton Karpov +7 (495) 795 0623 anton.karpov@fticonsulting.com
About Cherkizovo Group
Cherkizovo Group is the largest meat and feed producer in Russia. The Group is a top-3 producer in the poultry, pork and processed meat markets and is the largest feed manufacturer in the country.
Cherkizovo Group encompasses 8 full cycle poultry production facilities, 15 modern pork production facilities, 6 meat processing plants, 9 feed mills and more than 140,000 hectares of agricultural land. In 2015, Cherkizovo Group produced more than 825,000 tons of meat products.
Thanks to its vertically integrated structure, which includes grain growing and storage, feed production, livestock breeding, fattening and slaughtering, and meat processing, alongside a distribution system, the Group has consistently delivered stable, long-term sales growth and profitability. The Company's consolidated revenue reached RUB 77 bn in 2015.
Cherkizovo Group shares are traded on the London Stock Exchange (LSE) and on the Moscow Exchange (MOEX).
Some figures in this press-release are rounded for the reader's convenience.
Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of Cherkizovo Group. You can identify forward looking statements by terms such as 'expect,' 'believe,' 'anticipate,' 'estimate,' 'intend,' 'will,' 'could,' 'may' or 'might' the negative of such terms or other similar expressions. We wish to caution you that these statements are only predictions and that actual events or results may differ materially. We do not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in our projections or forward- looking statements, including, among others, general economic conditions, our competitive environment, risks associated with operating in Russia, rapid technological and market change in our industry, as well as many other risks specifically related to Cherkizovo Group and its operations.
*Non-IFRS financial measures. This press release includes financial information prepared in accordance with international financial reporting standards, or IFRS, as well as other financial measures referred to as non- IFRS. The non-IFRS financial measures should be considered in addition to, but not as a substitute for, the information prepared in accordance with IFRS.
Adjusted Earnings before Interest, Income Tax, Depreciation and Amortization ('Adjusted EBITDA'). Adjusted Earnings before Interest, Income Tax, Depreciation and Amortization ('Adjusted EBITDA'). Adjusted EBITDA represents income before income tax and non-controlling interests adjusted for interest, depreciation and amortization, foreign exchange differences, other finance income and net change in fair value of biological assets and agricultural produce as shown in the reconciliation in Appendix 1. Adjusted EBITDA margin is defined as Adjusted EBITDA as a percentage of our net revenues. Our adjusted EBITDA may not be similar to adjusted EBITDA measures of other companies; is not a measurement under IFRS accounting principles and should be considered in addition to, but not as a substitute for, the information contained in our consolidated statement of operations. We believe that adjusted EBITDA provides useful information to investors because it is an indicator of the strength and performance of our ongoing business operations, including our ability to fund discretionary spending such as capital expenditures, acquisitions and other investments and our ability to incur and service debt. While depreciation and amortization are considered operating costs under generally accepted accounting principles, these expenses primarily represent the non-cash current period allocation of costs associated with long-lived assets acquired or constructed in prior periods. Our adjusted EBITDA calculation is commonly used as one of the bases for investors, analysts and credit rating agencies to evaluate and compare the periodic and future operating performance and value of companies within our industry. Adjusted EBITDA is reconciled to our consolidated statements of operations in Appendix 1.
** Net debt is calculated as total debt minus cash and cash equivalents, short-term bank deposits and long-term bank deposits.
APPENDIX I: KEY DATA AND FIGURES UNAUDITED 9 Months 2016 ended September 30, 2016 Consolidated Selected Financial Data (RUB 000)
(in Meat- Pork Pou- Gra- Feed Corporate Inter- Comb- thousa- processi- ltr- in assets/ division## ined nds of ng y expenditure rubles)
Total 22 818 11 34 1 22 59 677 (33 018 59 sales 460 171 453 009 733 754) 226 291 166 121 050 011 includ- 370 040 128 1 41 - 59 677 (219 275) 1 406 ing 361 026 594 560 other 163 sales includ- (3 445 - (951 - - - - (4 ing 477) 690) 397 sales 167) volume discou- nts Inters- (15 232) (8 (1 (287 (22 (30 556) 33 018 754 - egment 897 427 698) 360 sales 343) 287) 638) Sales 22 803 2 33 721 372 29 121 - 59 to 228 273 025 423 412 226 extern- 948 879 011 al custom- ers Net - 968 457 11 - - - 1 437 change 454 393 227 074 in fair value of biolog- ical assets and agricu- ltural produce Cost of (18 926 (8 (29 (654 (22 (56 263) 33 224 977 (47 sales 107) 812 970 340) 434 629 665) 381) 342) 121) Gross 3 892 353 3 4 366 298 3 414 206 223 13 profit 327 940 008 708 033 / 080 178 964 (loss) Operat- (2 720 (549 (3 (204 (286 (1 980 116) 40 746 (9 ing 418) 605) 754 237) 871) 454 expense 100) 601) Operat- 1 171 935 2 1 161 11 (1 976 702) 246 969 3 579 ing 777 186 771 837 363 income 475 078 / (expens e) Other 99 204 24 (326 (1 226 842 596 (247 629) 617 income 462 165) 150) 474 792 (expens e), net Intere- (180 194) (427 (603 (41 (353 (565 378) 247 629 (1 st 022) 909) 652) 383) 923 expense 909) , net Profit 1 090 945 2 256 118 (115 (1 699 484) 246 969 2 273 before 374 004 969 072) 246 income 915 tax (divisi on profit) Adjust- ments for: Intere- 180 194 427 603 41 353 565 378 (247 629) 1 923 st 022 909 652 383 909 expense , net Intere- (6 939) (20 (128 (787 (10 (353 470) 247 629 (273 st 856) 678) ) 261) 362) income Foreign (100 446) (1 460 1 (215 (488 880) - (343 exchan- 153) 234 937 160) 468) ge loss/ (gain) Deprec- 485 167 653 1 57 449 107 567 - 3 202 iation 273 448 876 538 306 and 885 amorti- sation expense Net - (968 (457 (11 - - - (1 change 454) 393) 227) 437 in fair 074) value of biolog- ical assets and agricu- ltural produce Adjust- 1 648 921 2 2 208 462 (1 868 889) 246 969 5 345 ed 464 182 420 428 557 EBITDA 747 961
Total net division profit 2 273 246
Profit attributable to non-controlling 79 035 interests Income taxes (160 534) Profit attributable to Cherkizovo Group 2 191 747
##This amount represents unrealised margin on inter-division sales and relates mainly to the sale of grain from Grain to Feed division
UNAUDITED CONSOLIDATED INCOME STATEMENT DATA
(in thousands of rubles) Nine months ended Nine months ended 30 September 30 September 2016 2015
Sales 59 226 011 56 018 779 incl. Sales volume (4 397 167) (3 722 518) discounts incl. Sales returns (649 121) (769 900) Net change in fair value of 1 437 074 (660 973) biological assets and agricultural produce Cost of sales (47 629 121) (40 740 349) Gross profit 13 033 964 14 617 457 Gross margin 22.0% 26.1% Operating expenses (9 454 601) (8 182 527) Operating Income 3 579 363 6 434 930 Operating margin 6.0% 11.5% Profit before income tax 2 273 246 5 479 434 and non-controlling interests Profit attributable to 2 191 747 5 411 882 Group Cherkizovo Net profit margin 3.7% 9.7%
Weighted average number of 43 855 590 43 855 590 shares outstanding Earnings per share Profit attributable to 50,0 123,4 Cherkizovo Group per share - basic and diluted (rubles)
Consolidated Adjusted EBITDA reconciliation* Profit before income tax 2 273 246 5 479 434 and non-controlling interests Add: Interest expense, net of 1 923 909 852 697 subsidies Interest income (273 362) (115 658) Foreign exchange loss/ (343 468) 240 218 (gain), net Depreciation and 3 202 306 2 792 604 amortisation Net change in fair value of (1 437 074) 660 973 biological assets and agricultural produce Consolidated Adjusted 5 345 557 9 910 268 EBITDA* Adjusted EBITDA Margin 9.0% 17.7%
POULTRY DIVISION UNAUDITED INCOME STATEMENT DATA
(in thousands of rubles) Nine months ended Nine months ended 30 September 30 September 2016 2015
Total Sales 34 453 166 32 058 897 Interdivision sales (1 427 287) (1 632 840) Sales to external customers 33 025 879 30 426 057 Net change in fair value of 457 393 (312 860) biological assets and agricultural produce Cost of sales (29 970 381) (25 681 971) Gross profit 4 940 178 6 064 066 Gross margin 14.3% 18.9% Operating expenses (3 754 100) (3 609 783) Operating Income 1 186 078 2 454 283 Operating margin 3.4% 7.7% Interest income 128 678 126 371 Interest expense, net (603 909) (504 061) Other (expenses) income, (454 843) 383 461 net Division (loss) / profit 256 004 2 460 054 Division profit margin 0.7% 7.7%
Poultry processing division Adjusted EBITDA reconciliation* Division profit 256 004 2 460 054 Add: Interest expense, net of 603 909 504 061 subsidies Interest income (128 678) (126 371) Foreign exchange loss/ 460 234 (383 095) (gain) Depreciation and 1 448 885 1 397 546 amortisation Net change in fair value of (457 393) 312 860 biological assets and agricultural produce Poultry processing division 2 182 961 4 165 055 Adjusted EBITDA* Adjusted EBITDA Margin 6.3% 13.0%
PORK DIVISION UNAUDITED INCOME STATEMENT DATA
(in thousands of rubles) Nine months ended Nine months ended 30 September 30 September 2016 2015
Total Sales 11 171 291 12 681 982 Interdivision sales (8 897 343) (8 315 521) Sales to external customers 2 273 948 4 366 461 Net change in fair value of 968 454 (1 273 126) biological assets and agricultural produce Cost of sales (8 812 665) (7 540 269) Gross profit 3 327 080 3 868 587 Gross margin 29.8% 30.5% Operating expenses (549 605) (418 535) Operating Income 2 777 475 3 450 052 Operating margin 24.9% 27.2% Interest income 20 856 3 563 Interest expense, net (427 022) (234 686) Other (expenses)/income, net 3 606 (37 080) Division profit 2 374 915 3 181 849 Division profit margin 21.3% 25.1%
Pork division Adjusted EBITDA reconciliation* Division profit 2 374 915 3 181 849 Add: Interest expense, net of 427 022 234 686 subsidies Interest income (20 856) (3 563) Foreign exchange loss/(gain) (1 153) 37 874 Depreciation and amortisation 653 273 657 720 Net change in fair value of (968 454) 1 273 126 biological assets and agricultural produce Pork division Adjusted 2 464 747 5 381 692 EBITDA* Adjusted EBITDA Margin 22.1% 42.4%
MEAT PROCESSING DIVISION UNAUDITED INCOME STATEMENT DATA
(in thousands of rubles) Nine months ended Nine months ended 30 September 30 September 2016 2015
Total Sales 22 818 460 20 842 663 Interdivision sales (15 232) (16 709) Sales to external customers 22 803 228 20 825 954 Cost of sales (18 926 107) (17 835 148) Gross profit 3 892 353 3 007 515 Gross margin 17.1% 14.4% Operating expenses (2 720 418) (2 161 895) Operating Income 1 171 935 845 620 Operating margin 5.1% 4.1% Interest income 6 939 7 571 Interest expense, net (180 194) (146 517) Other (expenses)/income, net 92 265 (148 393) Division profit 1 090 945 558 281 Division profit margin 4.8% 2.7%
Meat processing division Adjusted EBITDA reconciliation* Division profit 1 090 945 558 281 Add: Interest expense, net of 180 194 146 517 subsidies Interest income (6 939) (7 571) Foreign exchange loss/ (gain) (100 446) 161 164 Depreciation and amortisation 485 167 339 893 Meat processing division 1 648 921 1 198 284 Adjusted EBITDA* Adjusted EBITDA Margin 7.2% 5.7%
FEED DIVISION UNAUDITED INCOME STATEMENT DATA
(in thousands of rubles) Nine months ended Nine months ended 30 September 30 September 2016 2015
Total Sales 22 733 050 20 068 244 Interdivision sales (22 360 638) (19 782 691) Sales to external customers 372 412 285 553 Cost of sales (22 434 342) (19 603 229) Gross profit 298 708 465 015 Gross margin 1.3% 2.3% Operating expenses (286 871) (390 343) Operating loss 11 837 74 672 Operating margin 0.1% 0.4% Interest income 10 261 19 478 Interest expense, net (353 383) (89 606) Other expenses, net 216 213 101 380 Division loss (115 072) 105 924 Division profit margin -0.5% 0.5%
Feed division Adjusted EBITDA reconciliation* Division loss (115 072) 105 924 Add: Interest expense, net of 353 383 89 606 subsidies Interest income (10 261) (19 478) Foreign exchange loss/ (215 160) (94 244) (gain) Depreciation and 449 538 305 025 amortisation Feed division Adjusted 462 428 386 833 EBITDA* Adjusted EBITDA Margin 2.0% 1.9%
APPENDIX II:
UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2016
(in thousands of Nine months Nine months Year ended rubles) ended ended 31 December 30 September 30 September 2015 2016 2015
Sales 59 226 011 56 018 779 77 032 622 Net change in fair 1 437 074 (660 973) (1 163 727) value of biological assets and agricultural produce Cost of sales (47 629 121) (40 740 349) (56 720 216) Gross profit 13 033 964 14 617 457 19 148 679 Selling, general and (9 756 412) (8 530 217) (11 947 142) administrative expense Other operating income 301 811 347 690 332 489 (expense), net Operating / Profit 3 579 363 6 434 930 7 534 026
Interest income 273 362 115 658 285 762 Interest expense, net (1 923 909) (852 697) (1 364 766) Other income 344 430 (218 457) (583 273) (expenses), net
Profit before income 2 273 246 5 479 434 5 871 749 tax Income tax (expense) (160 534) (32 910) 149 060 benefit Profit for the period 2 112 712 5 446 524 6 020 809 Profit, attributable 2 191 747 5 411 882 6 007 482 to Cherkizovo Non-controlling (79 035) 34 642 13 327 interests
APPENDIX III:
UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION AS OF 30 SEPTEMBER 2016
(in thousands of rubles) 30 September 31 December 2015 2016 ASSETS
Non-current assets Property, plant and 63 933 625 60 436 029 equipment Investment property 431 977 432 771 Goodwill 557 191 557 191 Intangible assets 1 895 990 1 603 903 Non-current biological 1 770 989 1 617 833 assets Notes receivable, net 350 000 300 000 Investments in joint 1 858 663 1 301 663 venture Long-term deposits in 641 365 641 365 banks Deferred tax assets 331 300 331 300 Other non-current 474 337 430 811 receivables Total non-current assets 72 245 437 67 652 866
Current assets Biological assets 13 566 222 9 829 675 Inventories 9 205 021 12 258 555 Taxes recoverable and 1 892 386 2 835 987 prepaid Trade receivables, net 5 001 383 4 444 991 Advances paid, net 1 832 557 2 733 842 Other receivables, net 2 495 148 1 782 019 Cash and cash equivalents 1 033 697 5 560 824 Other current assets 713 485 612 566 Total current assets 35 739 899 40 058 459
TOTAL ASSETS 107 985 336 107 711 325
UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSISION AS OF 30 September 2016 Continued
30 September 31 December 2015 2016 EQUITY AND LIABILITIES
Equity Share capital 440 440 Treasury shares (78 033) (78 033) Additional paid-in capital 5 588 320 5 588 320 Retained earnings 47 775 931 46 582 955 Total shareholder's equity 53 286 658 52 093 682 Non-controlling interest 977 484 1 055 392 Total equity 54 264 142 53 149 074
Non-current liabilities Long-term borrowings 15 789 559 16 118 747 Provisions 58 131 67 131 Deferred tax liability 453 851 405 097 Other liabilities 89 521 96 185 Total non-current 16 391 062 16 687 160 liabilities
Current liabilities Short-term borrowings 24 252 376 25 093 017 Trade payables 8 310 837 8 461 657 Advances received 335 190 443 018 Payables for non-current 1 522 247 1 445 128 assets Tax related liabilities 892 310 790 344 Payroll related liabilities 1 588 142 1 372 176 Other payables and accruals 429 030 269 751 Total current liabilities 37 330 132 37 875 091
Total liabilities 53 721 194 54 562 251
TOTAL EQUITY AND LIABILITIES 107 985 336 107 711 325
APPENDIX IV:
UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2016
Nine months Nine months Year ended ended ended 31 December 30 September 30 September 2015 2016 2015 CASH FLOWS FROM OPERATING ACTIVITIES Profit before 2 273 246 5 479 434 5 871 749 income tax Adjustments for: Depreciation and 3 202 306 2 792 604 3 826 525 amortization Bad debt expense 143 589 28 183 32 062 Foreign exchange (343 468) 240 218 646 802 (gain) loss, net Interest income (273 362) (115 658) (285 762) Interest expense, 1 923 909 852 697 1 364 766 net Net change in fair (1 437 074) 660 973 1 163 727 value of biological assets and agricultural produce Loss (gain) on (16 257) (39 760) (49 793) disposal of property, plant and equipment, net Gain on disposal of (285 475) (301 057) (282 827) non-current biological assets, net Other adjustments, (7 073) (23 816) (108 612) net Operating cash 5 180 341 9 573 818 12 178 637 flows before working capital changes Decrease (increase) 2 757 728 (2 108 098) (4 648 048) in inventories Increase in (1 942 579) (823 747) (1 586 899) biological assets Increase in trade (625 293) (269 861) (466 088) receivables Decrease (increase) 843 104 (159 459) (522 982)) in advances paid Decrease (increase) 835 817 (1 701 928) (1 450 027) in other receivables and other current assets Increase in other (35 978) (7 194) (28 022) non-current assets Increase in trade 183 531 1 838 506 3 607 415 payables Increase in tax 60 648 259 811 17 693 related liabilities (other than income tax) Increase (decrease) 209 109 (105 180) (651 507) in other current payables Operating cash 7 446 428 6 496 667 6 450 172 flows before interest and income tax Interest received 218 464 83 778 219 758 Interest paid (3 427 037) (2 429 840) (3 530 632) Government grants 883 766 1 398 749 2 019 481 for compensation of interest expense received Income tax paid (79 464) (139 957) (166 521) Net cash from 5 062 157 5 409 397 4 992 258 operating activities CASH FLOWS FROM INVESTING ACTIVITIES Purchases of (6 619 138) (6 889 777) (9 415 480) property, plant and equipment Purchases of non- (495 699) (346 553) (432 481) current biological assets Purchases of (316 412) (172 413) (273 343) intangible assets Proceeds from sale 45 830 178 260 220 832 of property, plant and equipment Proceeds from 561 159 478 384 537 051 disposal of non- current biological assets Investments in (557 000) (300 000) (450 000) joint venture Placing of deposits - (126 855) (156 855) and issuance of short-term loans Purchases of notes (50 000) (300 000) (300 000) receivable Repayment of short- 5 827 163 316 183 895 term loans issued and redemption of deposits Net cash used in (7 425 433) (7 315 638) (10 086 381) investing activities
UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2016 Continued
Nine months Nine months Year ended ended ended 31 December 30 September 30 September 2015 2016 2015 CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from long- 2 228 463 2 822 578 9 218 443 term loans Repayment of long-term (4 550 218) (3 861 045) (5 110 160) loans Proceeds from short- 17 767 593 15 332 101 21 686 431 term loans Repayment of short- (16 610 918) (9 896 718) (12 736 663) term loans Dividends paid (998 771) (2 395 334) (3 392 766) Acquisition of non- - (17 242) (17 892) controlling interests Net cash (used in) (2 163 851) 1 984 340 9 647 393 generated from financing activities
Net (decrease) (4 527 127) 78 099 4 553 270 increase in cash and cash equivalents
Cash and cash 5 560 824 1 007 554 1 007 554 equivalents at the beginning of the period
Cash and cash 1 033 697 1 085 653 5 560 824 equivalents at the end of the period
[1] Here and below, all average prices exclude VAT
---------------------------------------------------------------------------
The EquityStory.RS, LLC Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Archive at www.dgap.de/ukreg
---------------------------------------------------------------------------
Language: English Company: Cherkizovo Group Lesnaya str. 5B, White Square Office Center, 12th 125047 Moscow Russia Phone: +7 495 660-24-40 Fax: +7 495 788-32-32 E-mail: info@cherkizovo.com Internet: www.cherkizovo.com ISIN: US1641452032 Listed: Foreign Exchange(s) London, Moscow Category Code: QRT TIDM: CHE Sequence Number: 3601 Time of Receipt: 16-Nov-2016 / 08:45 CET/CEST End of Announcement EquityStory.RS, LLC News Service ---------------------------------------------------------------------------
521263 16-Nov-2016
Cherkizovo Group / 3rd Quarter Results
Cherkizovo Group: Announces financial results for the third quarter and nine
months of 2016
16-Nov-2016 / 09:00 CET/CEST
Dissemination of a Regulatory Announcement, transmitted by EquityStory.RS,
LLC - a company of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
---------------------------------------------------------------------------
Cherkizovo Group
Announces financial results for the third quarter and nine months of 2016
Moscow, Russia - November 16, 2016 - Cherkizovo Group (LSE: CHE; MOEX: GCHE) (hereinafter 'Cherkizovo', 'the Group' or 'the Company'), the largest vertically integrated meat and feed producer in Russia, today announces its unaudited consolidated IFRS results for the period ending September 30, 2016.
Third quarter financial highlights
- Net revenue came in at RUB 20.4 billion, was flat quarter-on-quarter or increase of 3% from RUB 19.8 billion vs. 3Q of 2015;
- Gross profit decreased by 4% to RUB 4.9 billion from RUB 5.1 billion in 2Q and increased by 61% from RUB 3.0 billion in 3Q 2015;
- Gross margin of 24.0% vs. 25.0% in 2Q 2016 and 15.3% in 3Q 2015;
- Operating expenses fell by 6% quarter-on-quarter to RUB 3.1 billion from RUB 3.3 billion in 2Q 2016 and increased by 9% from RUB 2.8 billion in 3Q 2015;
- Adjusted EBITDA* was 31% higher quarter-on-quarter and reached RUB 2.6 billion, compared to RUB 2.0 billion in 2Q 2016 and 24% lower from RUB 3.5 billion in the third quarter 2015;
- Adjusted EBITDA Margin of 12.8% compared to 9.9% in 2Q 2016 and 17.4% in 3Q 2015.
Nine months financial highlights
- Net revenue increased by 6% year-on-year to RUB 59.2 billion from RUB 56.0 billion in the corresponding period of 2015;
- Gross profit decreased by 11% year-on-year to RUB 13.0 billion, compared to RUB 14.6 billion in 9M of 2015;
- Gross margin fell to 22.0% from 26.1% in 9M 2015;
- Operating expenses grew by 16% year-on-year to RUB 9.5 billion, compared to RUB 8.2 billion in 9M of 2015;
- Adjusted EBITDA* of RUB 5.3 billion, compared to RUB 9.9 billion in the corresponding period of last year, a year-on-year drop of 46%;
- Adjusted EBITDA margin of 9.0%, compared to 17.7% in the first nine months of 2015;
- Net profit for the period was RUB 2.2 billion, down 60% year-on-year from RUB 5.4 billion in 9M 2015;
- Net operating cash flow for the period was RUB 5.1 billion compared to RUB 5.4 billion in 9M 2015;
- Net debt** was RUB 38.4 billion as of September 30, 2016 compared to RUB 30.7 billion as of September 30, 2015;
- The effective cost of debt was 6.1% (vs. 9M 2015 of 3.2%);
- Earnings per share of RUB 50.0 (in 9M 2015 EPS was RUB 123.4).
Key corporate highlights for the third quarter
- The first cluster of the new parent stock breeding farm was completed in Elets (Lipetsk region), which is a key step towards import substitution and the Group ultimately achieving self-sufficiency in hatching eggs;
- The slaughter facility at Tambov Turkey was launched at the end of September. First shipments of turkey products to retail chains will begin at the end of November;
- Cherkizovo Group started exporting poultry meat to Tanzania. The first shipments began in mid-August and are expected to reach 500 tons by the year-end;
- Cherkizovo Group implemented the SAP ERP solution on the HANA platform at the Petelino Trading House. The project was launched simultaneously across 14 sites and provides a centralised platform to help streamline operations and improve efficiency.
Sergei Mikhailov, the CEO of Cherkizovo Group, commented:
'We continued to see stronger financial performance during the third quarter, particularly in the meat processing segment, which delivered year- on-year EBITDA growth of 38%. The uptick we have seen over the last two quarters has been partially driven by many improvements we have made in operational efficiency. The markets we operate in are also showing tentative signs of recovery, with the stabilisation of both pork and poultry prices carrying through to the third quarter.
'While the broader economic recovery in Russia remains fragile for now, Cherkizovo Group continues to follow its diversification strategy by focusing on the value-added products, improving operational efficiency and further expanding into international markets. We have recently received permission to export our poultry products to the EU, which is a significant step forward in building our future export portfolio. With the progress that we are making in expanding exports and our strong and growing market position in Russia, we are well-positioned to capture future growth opportunities both domestically and internationally and have redoubled our efforts to achieve operational and working capital efficiencies and continue to deliver improved profitability and cash flow results.'
Financial summary
9M 16 9M 15 Year-on- 3Q 16 2Q 16 Quarter-on-quarter year change change mln RUB mln RUB % mln RUB mln RUB % Revenue 59,226. 56,018. 6% 20,391. 20,290. 0% 0 8 1 1 Gross 13,034. 14,617. (11%) 4,889.9 5,069.9 (4%) profit 0 5 Operat- (9,454. (8,182. 16% (3,083. (3,275. (6%) ing 6) 5) 3) 9) expens- es Adjust- 5,345.6 9,910.3 (46%) 2,617.9 2,002.3 31% ed EBITDA Adjust- 9.0% 17.7% 12.8% 9.9% ed EBITDA margin Operat- 3,579.4 6,434.9 (44%) 1,806.6 1,794.0 1% ing profit / (loss) Income 2,273.2 5,479.4 (59%) 1,326.8 1,438.9 (8%) / (Loss) before tax Profit 2,191.7 5,411.9 (60%) 1,242.9 1,389.7 (11%) / (loss) Net 5,065.6 5,409.4 (6%) 3,991.4 2,405.0 66% operat- ing cash flow Net 38,366. 35,009. 10% 38,366. 39,250. (2%) debt 9 61 9 6
1 as of December 31, 2015
Revenue
Net sales increased by 6% year-on-year in the nine months of 2016 to RUB 59.2 billion, compared to RUB 56.0 billion in the corresponding period of 2015. The main drivers behind this growth were the poultry and meat processing segments. In the third quarter sales growth was flat at RUB 20.4 billion.
Gross Profit
Gross profit fell by 11% year-on-year to RUB 13.0 billion from RUB 14.6 billion in the nine months of 2015. The majority of this decrease can be attributed to the poultry and pork segments, where a significant share of expenses is pegged to foreign currency. As a result of higher costs, the gross margin consequently fell to 22.0% in the nine months of 2016 from 26.1% in the corresponding period of 2015. In the third quarter gross profit decreased by 4% quarter-on-quarter to RUB 4.9 billion, compared to RUB 5.1 billion in the second quarter of 2016.
Operating Expenses
Operating expenses increased by 16% year-on-year to RUB 9.5 billion, compared to RUB 8.2 billion in the nine months of 2015, as a result of higher payroll, taxes (transportation, property) and other selling expenses. In the third quarter, however, operating expenses fell by 6% quarter-on-quarter to RUB 3.1 billion. Operating Expenses as percentage of sales increased to 16.0% in the nine months of 2016 from 14.6% in the corresponding period of last year.
Adjusted EBITDA
In the first nine months of 2016, adjusted EBITDA fell by 46% year-on-year to RUB 5.3 billion from RUB 9.9 billion in the corresponding period of 2015. The adjusted EBITDA margin fell to 9.0% in 9M 2016. Nonetheless, in the third quarter of 2016, EBITDA demonstrated growth of 31% and reached RUB 2.6 billion (2Q 2016: RUB 2.0 billion).
Interest Expense
Interest expense was up 28% year-on-year to RUB 3.5 billion in the nine months of 2016. The main drivers behind the increase were a 23% year-on- year increase in total loan portfolio to RUB 40.0 billion (9M 2015: RUB 32.5 billion), as well as a rise in bank's interest rates. Net interest expense for 9M 2016 was RUB 1.9 billion, up 126% from the 2015 level of RUB 0.9 billion. The Group accrued RUB 1.5 billion of subsidies in the nine months of 2016 included in the net interest expense above, a year-on-year decrease of 17%.
Net Profit
Net profit for the Group came in at RUB 2.2 billion, a decrease of 60% year-on-year from RUB 5.4 billion in the nine months of 2015. The Net Profit margin fell to 3.7% from 9.7% in the nine months of 2015.
Cash Flow
Net operating cash flow for nine months of 2016 was RUB 5.1 billion, compared with RUB 5.4 billion in the nine months of 2015. This was mostly the result of decreasing operating income.
Business segments
Divisio- Sales Sales Year-on-year Reven- Reven- Year-on- Share ns volume volume change ue ue year of 9M 9M % 9M 9M change Group 2016, 2015, 2016, 2015, % reve- thous- thous- RUB# RUB# nue and and mln mln % tons tons
Poultry 372.1 341.4 9% 34,453 32,058 7% 51% .2 .9 Pork 131.6 123.5 7% 11,171 12,682 (12%) 16% .3 .0 Meat 158.6 135.2 17% 22,818 20,842 9% 33% process- .5 .7 ing
# Includes intersegment sales
Poultry Division
Sales volume in the first nine months of 2016 increased by 9% year-on-year to 372,070 tons of sellable weight, from 341,370 tons in the corresponding period of 2015. This growth was driven by higher production levels, which resulted from improvements in efficiency, sales of excess inventory and the launch of new poultry houses at the Mosselprom production facility. In the third quarter of 2016, sales volume decreased by 4% quarter-on-quarter to 119,720 tons of sellable weight. This was a result of the Lipetsk Chicken Kingdom poultry production facility shifting to produce halal products, which weigh less than the non-halal equivalents, for exports.
The average price during the first nine months of 2016 dropped by 3% year- on-year to 92.26 RUB/kg [1] due to the market's remaining on the back of consumers' falling purchasing power. On a quarter-on-quarter basis, the average price grew by 6% to 96.89 RUB/kg.
Total sales for the division increased 7% year-on-year to RUB 34.5 billion (9M 2015: RUB 32.1 billion). Sales increased 1% quarter-on-quarter and reached RUB 11.6 billion (2Q 2016: RUB 11.5 billion)
Gross profit fell by 19% year-on-year to RUB 4.9 billion from RUB 6.1 billion in the first nine months of 2015 as costs for feed components, hatching eggs and veterinary supplies are denominated in foreign currency. The negative effect was mostly evident in the first quarter of the year when the Russian ruble hit a new historical low. Even though the currency exchange situation has stabilised since then, the average real exchange rate for the first nine months of 2016 was still 15% lower year-on-year. The gross margin for 9M 2016 decreased to 14.3% from 18.9% in the corresponding period of 2015. Between the second and third quarter of 2016, the segment's gross profit has delivered growth of 26%.
Operating expenses as a percentage of sales were 10.9% for the first nine months of the year (9M 2015: 11.3%).
Operating income fell by 52% year-on-year to RUB 1.2 billion from RUB 2.5 billion in the first nine months of 2015, while operating margin fell to 3.4% from 7.7% in the corresponding period of last year. Net profit for the division came in at RUB 0.3 billion, a year-on-year drop of 90%. This was mainly a result of the costs of feed components and other direct materials being pegged to foreign currencies.
Adjusted EBITDA dropped 48% year-on-year to RUB 2.2 billion (9M 2015: RUB 4.2 billion), while the adjusted EBITDA margin fell to 6.3% from 13.0% in the first nine months of 2015. However, on a quarter-on-quarter basis, EBITDA grew by 47% in the third quarter and reached RUB 1.2 billion (2Q 2016: RUB 0.8 billion).
Pork Division
In the first nine months of 2016, sales volume in the pork division increased by 7% year-on-year to 131,581 tons of sellable weight. This was primarily due to a new genetics improvement strategy launched by the management at the beginning of the year to improve pigs' health status and efficiency by increasing livability and weekly farrows. Meanwhile, on a quarter-on-quarter basis, sales volume fell by 4% to 44,679 tons as improvements in production levels and the genetics strategy outpaced the growth of available finishing space.
In 9M 2016, the average price decreased by 16% year-on-year to 86.59 RUB/ kg, while on a quarter-on-quarter basis, it increased by 10% to 93.19 RUB/ kg. The year-on-year drop was a result of Russian consumers' lower purchasing power and an overall increase in pork production across the country. The quarter-on-quarter improvement was due to an outbreak of ASF along with a steady decline of imports, which begun in June.
Total sales in the pork division fell 12% year-on-year to RUB 11.2 billion (9M 2015: RUB 12.7 billion). This dip in sales was expected as the average price fell by 16% year-on-year. On a quarter-on-quarter basis, however, sales increased by 5% and reached RUB 4.1 billion (2Q 2016: RUB 3.9 billion).
Gross profit for the nine months of 2016 stood at RUB 3.3 billion, a year- on-year drop of 14%, due to feed components and medication costs being denominated in foreign currencies. The segment's gross margin fell to 29.8% from 30.5% in 9M 2015. Nonetheless, the pork segment's gross profit increased by 21% between the second and third quarter of 2016.
Operating expenses as a percentage of sales were slightly higher compared to the corresponding period of last year and stood at 4.9% (9M 2015: 3.3%). Transportation tax was the main driver of the expense growth.
Operating income fell by 19% year-on-year to RUB 2.8 billion from RUB 3.5 billion in the nine months of 2015. The operating margin dropped to 24.9% from 27.2% the corresponding period last year. Net profit decreased by 25% year-on-year to RUB 2.4 billion (9M 2015: RUB 3.2 billion).
Adjusted EBITDA decreased to RUB 2.5 billion, a year-on-year decrease of 54%. The adjusted EBITDA margin fell to 22.1% in the nine months of 2016 from 42.4% in 9M 2015. On a quarter-on-quarter basis, adjusted EBITDA demonstrated growth of 44%.
Meat Processing Division
During 9M 2016, sales volume in the meat processing division grew by 17% year-on-year to 158,647 tons from 135,247 tons in the nine months of 2015. This increase was the result of the launch of a new pig slaughter facility at the Dankov meat processing plant in the second half of 2015, which boosted both volume and product assortment. On a quarter-on-quarter basis, sales volume increased by 3% in the third quarter to 55,749 tons.
In the nine months of 2016, the average price fell by 4% year-on-year to 166.91 RUB/kg due to non-sausage products from the Dankov meat processing plant representing a greater share of sales. The average price increased by 5% quarter-on-quarter to 171.49 RUB/kg due to higher demand for sausages and B2B/B2C products in the third quarter.
Total sales were 9% higher in the nine months of 2016 and reached RUB 22.8 billion (9M 2015: RUB 20.8 billion). In the third quarter, sales grew by 6% quarter-on-quarter.
Gross profit for the nine months of the year increased 29% year-on-year to RUB 3.9 billion, compared to RUB 3.0 billion in the corresponding period of 2015. The gross margin rose to 17.1% from 14.4% in the nine months of 2015. On a quarter-on-quarter basis, gross profit remained flat.
In the first nine months of 2016, operating expenses as a percentage of sales grew slightly to 11.9%, compared to 10.4% in the corresponding period of 2015. This was a result of higher transportation and payroll expenses.
In 9M 2016, operating income increased by 39% year-on-year to RUB 1.2 billion from RUB 0.8 billion in 9M 2015. The operating margin rose to 5.1% from 4.1% in 9M 2015. In the nine months of 2016, the meat processing segment generated net profit of RUB 1.1 billion, almost twice that of the corresponding period of 2015 (RUB 0.6 billion).
In the nine months of 2016, adjusted EBITDA demonstrated growth of 38% and reached RUB 1.6 billion (9M 2015: RUB 1.2 billion). The adjusted EBITDA margin reached 7.2% in 9M 2016, compared to 5.7% in 9M 2015. Adjusted EBITDA growth decreased by 12% on a quarter-on-quarter basis to RUB 0.6 billion.
Grain Division
Cherkizovo has begun its 2016 harvesting campaign and Russian harvests are expected to reach record levels this year. The Group expects to harvest a total of 500,000 tons of crops this year; wheat yields have already exceeded the budget.
Due to the seasonality of this business, the results of this segment are reported annually to better reflect the business performance and provide the appropriate basis for comparison.
Financial Position
The Group's capital expenditure on the property, plants, equipment and maintenance amounted to RUB 7.4 billion in the nine months of 2016, a year- on-year decrease of 8%. Of that, RUB 2.4 billion was invested into the poultry division, primarily into the construction of the hatchery and grain storage facility in the Lipetsk region (Eletsprom Project). In the pork division, RUB 2.3 billion was invested into purchasing equipment for the new finisher complexes in the Voronezh region, as well as constructing new finisher complexes in the Lipetsk region. The meat processing division received RUB 1.2 billion of investments for the construction of the Kashira meat processing plant in the Moscow Region. In the grain division, RUB 1.1 billion was invested into the construction of a new grain drying facility. Cherkizovo Group has also invested RUB 0.6 billion into the Tambov Turkey project.
As of 30 September, 2016, Net Debt amounted to RUB 38.4 billion, compared to RUB 35.0 billion at the end of 2015. Total debt was at RUB 40.0 billion as of 30 September 2016, a decrease of 3% from the end of 2015. As of 30 September 2016, long-term debt represented 39% of the debt portfolio and was RUB 15.8 billion. Short-term debt stood at RUB 24.3 billion, or 61% of the portfolio. The effective cost of debt was 6.1% in the nine months of 2016 (9M 2015: 3.2%). Subsidised loans and credit lines made up 77% of the debt portfolio in the nine months of 2016 (9M 2015: 86%). Cash and cash equivalents totalled RUB 1.0 billion as of 30 September, 2016.
Subsidies
In the first nine months of 2016, the Group accrued subsidies for interest reimbursement of RUB 1.5 billion, which offset interest expense (9M 2015: RUB 1.9 billion). The Group received RUB 1.1 billion of subsidies in 9M 2016, compared to RUB 1.4 billion in 9M 2015.
2016 Outlook
The third quarter has brought stability to the meat sales and pricing environment, which continues to improve as meat consumption in Russia shows some signs of growth. Both pork and poultry prices have also bottomed out and the Group expects this improving trend to continue in the fourth quarter this year. However, it is still too early to assess whether this positive trend will carry forward into next year.
The Group's export strategy is making a good progress as its shipments to Tanzania and Egypt have begun, and permission to export poultry products to the EU has also been granted. By the end of the year, Cherkizovo will start exporting poultry to Angola. The Group's total export volume is expected to reach 10,000 tons in the fourth quarter of 2016.
On the domestic market, the Tambov Turkey project is now fully operational with first shipments of turkey products set to begin in the fourth quarter of the year. In 2017, the facility will reach its full production capacity of 50,000 tons of turkey meat, which will position the Company as one of Russia's top turkey producers.
For the full year, the Company expects production and revenue growth across all segments, although the margins will be lower than last year following a challenging first quarter.
For more information please visit www.cherkizovo.com or contact
Cherkizovo Group
Dmitry Yakovlev IR Manager +7 (495) 660 2440 ext. 15962 d.yakovlev@cherkizovo.com
FTI Consulting
Anton Karpov +7 (495) 795 0623 anton.karpov@fticonsulting.com
About Cherkizovo Group
Cherkizovo Group is the largest meat and feed producer in Russia. The Group is a top-3 producer in the poultry, pork and processed meat markets and is the largest feed manufacturer in the country.
Cherkizovo Group encompasses 8 full cycle poultry production facilities, 15 modern pork production facilities, 6 meat processing plants, 9 feed mills and more than 140,000 hectares of agricultural land. In 2015, Cherkizovo Group produced more than 825,000 tons of meat products.
Thanks to its vertically integrated structure, which includes grain growing and storage, feed production, livestock breeding, fattening and slaughtering, and meat processing, alongside a distribution system, the Group has consistently delivered stable, long-term sales growth and profitability. The Company's consolidated revenue reached RUB 77 bn in 2015.
Cherkizovo Group shares are traded on the London Stock Exchange (LSE) and on the Moscow Exchange (MOEX).
Some figures in this press-release are rounded for the reader's convenience.
Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of Cherkizovo Group. You can identify forward looking statements by terms such as 'expect,' 'believe,' 'anticipate,' 'estimate,' 'intend,' 'will,' 'could,' 'may' or 'might' the negative of such terms or other similar expressions. We wish to caution you that these statements are only predictions and that actual events or results may differ materially. We do not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in our projections or forward- looking statements, including, among others, general economic conditions, our competitive environment, risks associated with operating in Russia, rapid technological and market change in our industry, as well as many other risks specifically related to Cherkizovo Group and its operations.
*Non-IFRS financial measures. This press release includes financial information prepared in accordance with international financial reporting standards, or IFRS, as well as other financial measures referred to as non- IFRS. The non-IFRS financial measures should be considered in addition to, but not as a substitute for, the information prepared in accordance with IFRS.
Adjusted Earnings before Interest, Income Tax, Depreciation and Amortization ('Adjusted EBITDA'). Adjusted Earnings before Interest, Income Tax, Depreciation and Amortization ('Adjusted EBITDA'). Adjusted EBITDA represents income before income tax and non-controlling interests adjusted for interest, depreciation and amortization, foreign exchange differences, other finance income and net change in fair value of biological assets and agricultural produce as shown in the reconciliation in Appendix 1. Adjusted EBITDA margin is defined as Adjusted EBITDA as a percentage of our net revenues. Our adjusted EBITDA may not be similar to adjusted EBITDA measures of other companies; is not a measurement under IFRS accounting principles and should be considered in addition to, but not as a substitute for, the information contained in our consolidated statement of operations. We believe that adjusted EBITDA provides useful information to investors because it is an indicator of the strength and performance of our ongoing business operations, including our ability to fund discretionary spending such as capital expenditures, acquisitions and other investments and our ability to incur and service debt. While depreciation and amortization are considered operating costs under generally accepted accounting principles, these expenses primarily represent the non-cash current period allocation of costs associated with long-lived assets acquired or constructed in prior periods. Our adjusted EBITDA calculation is commonly used as one of the bases for investors, analysts and credit rating agencies to evaluate and compare the periodic and future operating performance and value of companies within our industry. Adjusted EBITDA is reconciled to our consolidated statements of operations in Appendix 1.
** Net debt is calculated as total debt minus cash and cash equivalents, short-term bank deposits and long-term bank deposits.
APPENDIX I: KEY DATA AND FIGURES UNAUDITED 9 Months 2016 ended September 30, 2016 Consolidated Selected Financial Data (RUB 000)
(in Meat- Pork Pou- Gra- Feed Corporate Inter- Comb- thousa- processi- ltr- in assets/ division## ined nds of ng y expenditure rubles)
Total 22 818 11 34 1 22 59 677 (33 018 59 sales 460 171 453 009 733 754) 226 291 166 121 050 011 includ- 370 040 128 1 41 - 59 677 (219 275) 1 406 ing 361 026 594 560 other 163 sales includ- (3 445 - (951 - - - - (4 ing 477) 690) 397 sales 167) volume discou- nts Inters- (15 232) (8 (1 (287 (22 (30 556) 33 018 754 - egment 897 427 698) 360 sales 343) 287) 638) Sales 22 803 2 33 721 372 29 121 - 59 to 228 273 025 423 412 226 extern- 948 879 011 al custom- ers Net - 968 457 11 - - - 1 437 change 454 393 227 074 in fair value of biolog- ical assets and agricu- ltural produce Cost of (18 926 (8 (29 (654 (22 (56 263) 33 224 977 (47 sales 107) 812 970 340) 434 629 665) 381) 342) 121) Gross 3 892 353 3 4 366 298 3 414 206 223 13 profit 327 940 008 708 033 / 080 178 964 (loss) Operat- (2 720 (549 (3 (204 (286 (1 980 116) 40 746 (9 ing 418) 605) 754 237) 871) 454 expense 100) 601) Operat- 1 171 935 2 1 161 11 (1 976 702) 246 969 3 579 ing 777 186 771 837 363 income 475 078 / (expens e) Other 99 204 24 (326 (1 226 842 596 (247 629) 617 income 462 165) 150) 474 792 (expens e), net Intere- (180 194) (427 (603 (41 (353 (565 378) 247 629 (1 st 022) 909) 652) 383) 923 expense 909) , net Profit 1 090 945 2 256 118 (115 (1 699 484) 246 969 2 273 before 374 004 969 072) 246 income 915 tax (divisi on profit) Adjust- ments for: Intere- 180 194 427 603 41 353 565 378 (247 629) 1 923 st 022 909 652 383 909 expense , net Intere- (6 939) (20 (128 (787 (10 (353 470) 247 629 (273 st 856) 678) ) 261) 362) income Foreign (100 446) (1 460 1 (215 (488 880) - (343 exchan- 153) 234 937 160) 468) ge loss/ (gain) Deprec- 485 167 653 1 57 449 107 567 - 3 202 iation 273 448 876 538 306 and 885 amorti- sation expense Net - (968 (457 (11 - - - (1 change 454) 393) 227) 437 in fair 074) value of biolog- ical assets and agricu- ltural produce Adjust- 1 648 921 2 2 208 462 (1 868 889) 246 969 5 345 ed 464 182 420 428 557 EBITDA 747 961
Total net division profit 2 273 246
Profit attributable to non-controlling 79 035 interests Income taxes (160 534) Profit attributable to Cherkizovo Group 2 191 747
##This amount represents unrealised margin on inter-division sales and relates mainly to the sale of grain from Grain to Feed division
UNAUDITED CONSOLIDATED INCOME STATEMENT DATA
(in thousands of rubles) Nine months ended Nine months ended 30 September 30 September 2016 2015
Sales 59 226 011 56 018 779 incl. Sales volume (4 397 167) (3 722 518) discounts incl. Sales returns (649 121) (769 900) Net change in fair value of 1 437 074 (660 973) biological assets and agricultural produce Cost of sales (47 629 121) (40 740 349) Gross profit 13 033 964 14 617 457 Gross margin 22.0% 26.1% Operating expenses (9 454 601) (8 182 527) Operating Income 3 579 363 6 434 930 Operating margin 6.0% 11.5% Profit before income tax 2 273 246 5 479 434 and non-controlling interests Profit attributable to 2 191 747 5 411 882 Group Cherkizovo Net profit margin 3.7% 9.7%
Weighted average number of 43 855 590 43 855 590 shares outstanding Earnings per share Profit attributable to 50,0 123,4 Cherkizovo Group per share - basic and diluted (rubles)
Consolidated Adjusted EBITDA reconciliation* Profit before income tax 2 273 246 5 479 434 and non-controlling interests Add: Interest expense, net of 1 923 909 852 697 subsidies Interest income (273 362) (115 658) Foreign exchange loss/ (343 468) 240 218 (gain), net Depreciation and 3 202 306 2 792 604 amortisation Net change in fair value of (1 437 074) 660 973 biological assets and agricultural produce Consolidated Adjusted 5 345 557 9 910 268 EBITDA* Adjusted EBITDA Margin 9.0% 17.7%
POULTRY DIVISION UNAUDITED INCOME STATEMENT DATA
(in thousands of rubles) Nine months ended Nine months ended 30 September 30 September 2016 2015
Total Sales 34 453 166 32 058 897 Interdivision sales (1 427 287) (1 632 840) Sales to external customers 33 025 879 30 426 057 Net change in fair value of 457 393 (312 860) biological assets and agricultural produce Cost of sales (29 970 381) (25 681 971) Gross profit 4 940 178 6 064 066 Gross margin 14.3% 18.9% Operating expenses (3 754 100) (3 609 783) Operating Income 1 186 078 2 454 283 Operating margin 3.4% 7.7% Interest income 128 678 126 371 Interest expense, net (603 909) (504 061) Other (expenses) income, (454 843) 383 461 net Division (loss) / profit 256 004 2 460 054 Division profit margin 0.7% 7.7%
Poultry processing division Adjusted EBITDA reconciliation* Division profit 256 004 2 460 054 Add: Interest expense, net of 603 909 504 061 subsidies Interest income (128 678) (126 371) Foreign exchange loss/ 460 234 (383 095) (gain) Depreciation and 1 448 885 1 397 546 amortisation Net change in fair value of (457 393) 312 860 biological assets and agricultural produce Poultry processing division 2 182 961 4 165 055 Adjusted EBITDA* Adjusted EBITDA Margin 6.3% 13.0%
PORK DIVISION UNAUDITED INCOME STATEMENT DATA
(in thousands of rubles) Nine months ended Nine months ended 30 September 30 September 2016 2015
Total Sales 11 171 291 12 681 982 Interdivision sales (8 897 343) (8 315 521) Sales to external customers 2 273 948 4 366 461 Net change in fair value of 968 454 (1 273 126) biological assets and agricultural produce Cost of sales (8 812 665) (7 540 269) Gross profit 3 327 080 3 868 587 Gross margin 29.8% 30.5% Operating expenses (549 605) (418 535) Operating Income 2 777 475 3 450 052 Operating margin 24.9% 27.2% Interest income 20 856 3 563 Interest expense, net (427 022) (234 686) Other (expenses)/income, net 3 606 (37 080) Division profit 2 374 915 3 181 849 Division profit margin 21.3% 25.1%
Pork division Adjusted EBITDA reconciliation* Division profit 2 374 915 3 181 849 Add: Interest expense, net of 427 022 234 686 subsidies Interest income (20 856) (3 563) Foreign exchange loss/(gain) (1 153) 37 874 Depreciation and amortisation 653 273 657 720 Net change in fair value of (968 454) 1 273 126 biological assets and agricultural produce Pork division Adjusted 2 464 747 5 381 692 EBITDA* Adjusted EBITDA Margin 22.1% 42.4%
MEAT PROCESSING DIVISION UNAUDITED INCOME STATEMENT DATA
(in thousands of rubles) Nine months ended Nine months ended 30 September 30 September 2016 2015
Total Sales 22 818 460 20 842 663 Interdivision sales (15 232) (16 709) Sales to external customers 22 803 228 20 825 954 Cost of sales (18 926 107) (17 835 148) Gross profit 3 892 353 3 007 515 Gross margin 17.1% 14.4% Operating expenses (2 720 418) (2 161 895) Operating Income 1 171 935 845 620 Operating margin 5.1% 4.1% Interest income 6 939 7 571 Interest expense, net (180 194) (146 517) Other (expenses)/income, net 92 265 (148 393) Division profit 1 090 945 558 281 Division profit margin 4.8% 2.7%
Meat processing division Adjusted EBITDA reconciliation* Division profit 1 090 945 558 281 Add: Interest expense, net of 180 194 146 517 subsidies Interest income (6 939) (7 571) Foreign exchange loss/ (gain) (100 446) 161 164 Depreciation and amortisation 485 167 339 893 Meat processing division 1 648 921 1 198 284 Adjusted EBITDA* Adjusted EBITDA Margin 7.2% 5.7%
FEED DIVISION UNAUDITED INCOME STATEMENT DATA
(in thousands of rubles) Nine months ended Nine months ended 30 September 30 September 2016 2015
Total Sales 22 733 050 20 068 244 Interdivision sales (22 360 638) (19 782 691) Sales to external customers 372 412 285 553 Cost of sales (22 434 342) (19 603 229) Gross profit 298 708 465 015 Gross margin 1.3% 2.3% Operating expenses (286 871) (390 343) Operating loss 11 837 74 672 Operating margin 0.1% 0.4% Interest income 10 261 19 478 Interest expense, net (353 383) (89 606) Other expenses, net 216 213 101 380 Division loss (115 072) 105 924 Division profit margin -0.5% 0.5%
Feed division Adjusted EBITDA reconciliation* Division loss (115 072) 105 924 Add: Interest expense, net of 353 383 89 606 subsidies Interest income (10 261) (19 478) Foreign exchange loss/ (215 160) (94 244) (gain) Depreciation and 449 538 305 025 amortisation Feed division Adjusted 462 428 386 833 EBITDA* Adjusted EBITDA Margin 2.0% 1.9%
APPENDIX II:
UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2016
(in thousands of Nine months Nine months Year ended rubles) ended ended 31 December 30 September 30 September 2015 2016 2015
Sales 59 226 011 56 018 779 77 032 622 Net change in fair 1 437 074 (660 973) (1 163 727) value of biological assets and agricultural produce Cost of sales (47 629 121) (40 740 349) (56 720 216) Gross profit 13 033 964 14 617 457 19 148 679 Selling, general and (9 756 412) (8 530 217) (11 947 142) administrative expense Other operating income 301 811 347 690 332 489 (expense), net Operating / Profit 3 579 363 6 434 930 7 534 026
Interest income 273 362 115 658 285 762 Interest expense, net (1 923 909) (852 697) (1 364 766) Other income 344 430 (218 457) (583 273) (expenses), net
Profit before income 2 273 246 5 479 434 5 871 749 tax Income tax (expense) (160 534) (32 910) 149 060 benefit Profit for the period 2 112 712 5 446 524 6 020 809 Profit, attributable 2 191 747 5 411 882 6 007 482 to Cherkizovo Non-controlling (79 035) 34 642 13 327 interests
APPENDIX III:
UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION AS OF 30 SEPTEMBER 2016
(in thousands of rubles) 30 September 31 December 2015 2016 ASSETS
Non-current assets Property, plant and 63 933 625 60 436 029 equipment Investment property 431 977 432 771 Goodwill 557 191 557 191 Intangible assets 1 895 990 1 603 903 Non-current biological 1 770 989 1 617 833 assets Notes receivable, net 350 000 300 000 Investments in joint 1 858 663 1 301 663 venture Long-term deposits in 641 365 641 365 banks Deferred tax assets 331 300 331 300 Other non-current 474 337 430 811 receivables Total non-current assets 72 245 437 67 652 866
Current assets Biological assets 13 566 222 9 829 675 Inventories 9 205 021 12 258 555 Taxes recoverable and 1 892 386 2 835 987 prepaid Trade receivables, net 5 001 383 4 444 991 Advances paid, net 1 832 557 2 733 842 Other receivables, net 2 495 148 1 782 019 Cash and cash equivalents 1 033 697 5 560 824 Other current assets 713 485 612 566 Total current assets 35 739 899 40 058 459
TOTAL ASSETS 107 985 336 107 711 325
UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSISION AS OF 30 September 2016 Continued
30 September 31 December 2015 2016 EQUITY AND LIABILITIES
Equity Share capital 440 440 Treasury shares (78 033) (78 033) Additional paid-in capital 5 588 320 5 588 320 Retained earnings 47 775 931 46 582 955 Total shareholder's equity 53 286 658 52 093 682 Non-controlling interest 977 484 1 055 392 Total equity 54 264 142 53 149 074
Non-current liabilities Long-term borrowings 15 789 559 16 118 747 Provisions 58 131 67 131 Deferred tax liability 453 851 405 097 Other liabilities 89 521 96 185 Total non-current 16 391 062 16 687 160 liabilities
Current liabilities Short-term borrowings 24 252 376 25 093 017 Trade payables 8 310 837 8 461 657 Advances received 335 190 443 018 Payables for non-current 1 522 247 1 445 128 assets Tax related liabilities 892 310 790 344 Payroll related liabilities 1 588 142 1 372 176 Other payables and accruals 429 030 269 751 Total current liabilities 37 330 132 37 875 091
Total liabilities 53 721 194 54 562 251
TOTAL EQUITY AND LIABILITIES 107 985 336 107 711 325
APPENDIX IV:
UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2016
Nine months Nine months Year ended ended ended 31 December 30 September 30 September 2015 2016 2015 CASH FLOWS FROM OPERATING ACTIVITIES Profit before 2 273 246 5 479 434 5 871 749 income tax Adjustments for: Depreciation and 3 202 306 2 792 604 3 826 525 amortization Bad debt expense 143 589 28 183 32 062 Foreign exchange (343 468) 240 218 646 802 (gain) loss, net Interest income (273 362) (115 658) (285 762) Interest expense, 1 923 909 852 697 1 364 766 net Net change in fair (1 437 074) 660 973 1 163 727 value of biological assets and agricultural produce Loss (gain) on (16 257) (39 760) (49 793) disposal of property, plant and equipment, net Gain on disposal of (285 475) (301 057) (282 827) non-current biological assets, net Other adjustments, (7 073) (23 816) (108 612) net Operating cash 5 180 341 9 573 818 12 178 637 flows before working capital changes Decrease (increase) 2 757 728 (2 108 098) (4 648 048) in inventories Increase in (1 942 579) (823 747) (1 586 899) biological assets Increase in trade (625 293) (269 861) (466 088) receivables Decrease (increase) 843 104 (159 459) (522 982)) in advances paid Decrease (increase) 835 817 (1 701 928) (1 450 027) in other receivables and other current assets Increase in other (35 978) (7 194) (28 022) non-current assets Increase in trade 183 531 1 838 506 3 607 415 payables Increase in tax 60 648 259 811 17 693 related liabilities (other than income tax) Increase (decrease) 209 109 (105 180) (651 507) in other current payables Operating cash 7 446 428 6 496 667 6 450 172 flows before interest and income tax Interest received 218 464 83 778 219 758 Interest paid (3 427 037) (2 429 840) (3 530 632) Government grants 883 766 1 398 749 2 019 481 for compensation of interest expense received Income tax paid (79 464) (139 957) (166 521) Net cash from 5 062 157 5 409 397 4 992 258 operating activities CASH FLOWS FROM INVESTING ACTIVITIES Purchases of (6 619 138) (6 889 777) (9 415 480) property, plant and equipment Purchases of non- (495 699) (346 553) (432 481) current biological assets Purchases of (316 412) (172 413) (273 343) intangible assets Proceeds from sale 45 830 178 260 220 832 of property, plant and equipment Proceeds from 561 159 478 384 537 051 disposal of non- current biological assets Investments in (557 000) (300 000) (450 000) joint venture Placing of deposits - (126 855) (156 855) and issuance of short-term loans Purchases of notes (50 000) (300 000) (300 000) receivable Repayment of short- 5 827 163 316 183 895 term loans issued and redemption of deposits Net cash used in (7 425 433) (7 315 638) (10 086 381) investing activities
UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2016 Continued
Nine months Nine months Year ended ended ended 31 December 30 September 30 September 2015 2016 2015 CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from long- 2 228 463 2 822 578 9 218 443 term loans Repayment of long-term (4 550 218) (3 861 045) (5 110 160) loans Proceeds from short- 17 767 593 15 332 101 21 686 431 term loans Repayment of short- (16 610 918) (9 896 718) (12 736 663) term loans Dividends paid (998 771) (2 395 334) (3 392 766) Acquisition of non- - (17 242) (17 892) controlling interests Net cash (used in) (2 163 851) 1 984 340 9 647 393 generated from financing activities
Net (decrease) (4 527 127) 78 099 4 553 270 increase in cash and cash equivalents
Cash and cash 5 560 824 1 007 554 1 007 554 equivalents at the beginning of the period
Cash and cash 1 033 697 1 085 653 5 560 824 equivalents at the end of the period
[1] Here and below, all average prices exclude VAT
---------------------------------------------------------------------------
The EquityStory.RS, LLC Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Archive at www.dgap.de/ukreg
---------------------------------------------------------------------------
Language: English Company: Cherkizovo Group Lesnaya str. 5B, White Square Office Center, 12th 125047 Moscow Russia Phone: +7 495 660-24-40 Fax: +7 495 788-32-32 E-mail: info@cherkizovo.com Internet: www.cherkizovo.com ISIN: US1641452032 Listed: Foreign Exchange(s) London, Moscow Category Code: QRT TIDM: CHE Sequence Number: 3601 Time of Receipt: 16-Nov-2016 / 08:45 CET/CEST End of Announcement EquityStory.RS, LLC News Service ---------------------------------------------------------------------------
521263 16-Nov-2016
Der finanzen.at Ratgeber für Aktien!
Wenn Sie mehr über das Thema Aktien erfahren wollen, finden Sie in unserem Ratgeber viele interessante Artikel dazu!
Jetzt informieren!
Nachrichten zu Cherkizovo Group PJSC (spons. GDR)mehr Nachrichten
| Keine Nachrichten verfügbar. |
Analysen zu Cherkizovo Group PJSC (spons. GDR)mehr Analysen
ETF-Sparplan
Oskar ist der einfache und intelligente ETF-Sparplan. Er übernimmt die ETF-Auswahl, ist steuersmart, transparent und kostengünstig.