Moscow, Russia - January 15, 2019- Cherkizovo Group (MOEX: GCHE), the largest vertically integrated meat producer in Russia, today announces operating results for December, the fourth quarter and full 2018. [1]

Fourth quarter 2018 highlights:

Chicken: Sales volume growth in 4Q18 was supported by the consolidation of Altai Broiler results, which added 5 thousand tonnes in December. Average sales price increased by 32% y-o-y and 13% q-o-q on the back of better sales mix with more products under Petelinka and Chicken Kingdom brand, as well as the further shift to the deboned and high value-added products, as well as supply cuts by other chicken producers.

Turkey: JV Tambov Turkey sales volume of 9.6 thousand tonnes remained unchanged compared to 4Q17 and was up 3% compared to the previous quarter. Average sales price improved by 46% y-o-y and 21% q-o-q due to the ongoing expansion of Pava-Pava branded offering and supported by supply dislocations on the market.

Pork: Production and sales volume were higher, compared to both 4Q17 results and the previous quarter as we ramped up output at newly built facilities. Prices gained 19% compared to 4Q18, but declined 9% compared to the previous quarter, on seasonally rising supply and in anticipation of the Brazilian pork imports ban lift.

Meat Processing: Sales volume remained in line with 4Q17 and previous quarter, with cuts declining further, offset by growth of carcass. In sausages category, a shift towards dry, semi-smoked sausages and hams in the sales mix contributed to a higher average sales price.

Grain (2018 results): Sales volume of 696 thousand tonnes was up 54% mainly due to the sales of grains inventory accumulated from 2017 harvest. The total harvest of 2018 amounted to 480 thousand tonnes, down 24% compared to 2017, as we scaled down corn and wheat acreage. The average sales price was driven by higher amounts of wheat and sunflower, as well as average market prices for wheat and corn rising by 56% and 17% respectively.

Monthly performance

December
2018

December
2017

Change
% y-o-y

November
2018

Change
% m-o-m

Chicken

Volume sold, thousand tonnes

51.50

44.94

15%

47.51

8%

Average price, RUB/kg

116.54

86.26

35%

112.35

4%

Turkey*

Volume sold, thousand tonnes

3.38

3.31

2%

3.16

7%

Average price, RUB/kg

204.30

134.30

52%

182.32

12%

Pork**

Volume produced, thousand tonnes

27.32

21.52

27%

23.71

15%

Volume sold, thousand tonnes

26.42

20.54

29%

22.97

15%

Average price, RUB/kg

96.86

83.68

16%

105.00

(8%)

Meat Processing

Volume, thousand tonnes

20.72

20.13

3%

19.05

9%

Sausages

9.63

9.39

3%

8.57

12%

Cuts

3.02

4.86

(38%)

2.88

5%

Carcass

6.96

4.90

42%

6.50

7%

By-products

1.11

0.98

13%

1.11

0%

Average price, RUB/kg

185.79

164.66

13%

180.48

3%

Sausages

215.03

184.11

17%

197.30

9%

Cuts

231.96

189.06

23%

225.86

3%

Carcass

148.12

125.06

18%

158.53

(7%)

By-products

42.80

55.40

(23%)

61.07

(30%)

Quarterly performance

4Q
2018

4Q
2017

Change
% y-o-y

3Q
2018

Change
% q-o-q

Chicken

Volume sold, thousand tonnes

144.35

137.12

5%

131.27

10%

Average price, RUB/kg

112.39

85.20

32%

99.14

13%

Turkey*

Volume sold, thousand tonnes

9.61

9.66

(1%)

9.34

3%

Average price, RUB/kg

188.05

128.97

46%

155.34

21%

Pork**

Volume produced, thousand tonnes

72.72

63.03

15%

59.37

22%

Volume sold, thousand tonnes

70.20

59.96

17%

56.85

23%

Average price, RUB/kg

100.61

84.75

19%

110.98

(9%)

Meat Processing

Volume, thousand tonnes

59.64

59.51

0%

59.35

0%

Sausages

27.69

28.65

(3%)

27.23

2%

Cuts

9.02

13.83

(35%)

9.67

(7%)

Carcass

19.90

14.07

41%

19.10

4%

By-products

3.04

2.95

3%

3.33

(9%)

Average price, RUB/kg

180.86

163.61

11%

175.22

3%

Sausages

201.11

176.98

14%

182.00

10%

Cuts

226.08

196.00

15%

223.44

1%

Carcass

151.69

126.41

20%

162.68

(7%)

By-products

53.23

59.40

(10%)

51.84

3%

Annualperformance

2018

2017

Change
% y-o-y

Chicken

Volume sold, thousand tonnes

544.15

522.50

4%

Average price, RUB/kg

96.89

88.84

9%

Turkey*

Volume sold, thousand tonnes

39.25

26.32

49%

Average price, RUB/kg

147.95

145.29

2%

Pork**

Volume produced, thousand tonnes

247.27

211.75

17%

Volume sold, thousand tonnes

236.87

200.31

18%

Average price, RUB/kg

98.20

92.12

7%

Meat Processing

Volume, thousand tonnes

229.52

204.24

12%

Sausages

106.73

110.78

(4%)

Cuts

40.33

52.97

(24%)

Carcass

70.28

30.84

128%

By-products

12.18

9.65

26%

Average price, RUB/kg

169.64

170.07

(0%)

Sausages

184.45

174.61

6%

Cuts

205.29

200.51

2%

Carcass

146.74

136.18

8%

By-products

53.86

59.25

(9%)

Grain***

Volume harvested, thousand tonnes

479.73

631.90

(24%)

Volume sold, thousand tonnes

696.09

453.27

54%

Wheat

349.73

228.44

53%

Corn

172.85

127.77

35%

Sunflower

85.96

9.49

806%

Barley

31.18

32.70

(5%)

Soybean

25.11

25.12

(0%)

Other

31.26

29.76

5%

Average price, RUB/kg

9.92

7.02

41%

Wheat

8.94

5.74

56%

Corn

6.32

5.42

17%

Sunflower

17.43

17.89

(3%)

Barley

9.31

5.76

61%

Soybean

23.27

21.78

7%

Other

10.00

9.18

9%

* Volume and prices reported in turkey section represent sales of the Trading Company 'Cherkizovo'.

** Difference in the volume produced and volume sold in the pork segment is attributable to retained gilts replacement. Volumes sold include both intercompany and 3rd party sales.

*** All volumes are in dry weight.

For more information please visithttp://www.cherkizovo.comor contact:

Investor Relations
Andrei Novikov
Phone: +7 495 660-24-40 ext. 15430
Email: a.novikov@cherkizovo.com

Media contacts
Phone: +7 495 660-24-40
Email: pr@cherkizovo.com

About Cherkizovo Group

Cherkizovo Group is the largest meat producer in Russia. The Group is a top-3 producer in each of the Russian poultry, pork and processed meat markets.

Cherkizovo Group encompasses nine full cycle poultry production facilities, sixteen modern pork production facilities, six meat processing plants, nine feed mills and around 287,000 hectares of agricultural land. The Group also includes Tambov Turkey facility, a joint Russian-Spanish venture. In 2018, Cherkizovo Group produced c.1 million tonnes of meat and meat products. The Group's consolidated revenue was RUB 90.5 billion in 2017.

The Group operates a vertically integrated business model, including grain growing and storage, feed production, livestock breeding, fattening and slaughtering, and meat processing, alongside a distribution system. The company focuses on satisfying consumer needs with quality meat products.

Cherkizovo Group shares are traded on the Moscow Exchange (MOEX).


[1] Volume data is presented before intersegment eliminations and denotes to sales volumes except noted (**).

All prices in the release are net of sales volume discounts and VAT.

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Cherkizovo Group OAO published this content on 15 January 2019 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 15 January 2019 16:48:05 UTC