Cherkizovo forecast a fillip from Russia's curbs on meat imports as the chicken-to-sausages group heralded "strong" 2009 results, led by a 38% jump in pork production.
The statement sent shares in the Moscow-based group up 11% to their highest since July 2008.
Cherkizovo said that Russia's drive to turn from the world's biggest global meat importer to self-sufficiency would stimulate a "positive pricing environment" for meat products.
A cut to Russia's poultry import quotas had already helped the Moscow-based group enjoy a 16% rise, to 74.33 roubles per kilogramme, in the average price of its poultry products last year.
Self-sufficiency drive
Yelena Skrynnik, Russia's farm minister, last week placed a deadline of three years on the country becoming self sufficient in poultry, and placed exports on the agenda within four or five years.
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Russia's meat imports 2010: year-on-year change, global ranking
Beef: 780,000 tonnes, +11.4%, 2nd
Broiler: 820,000 tonnes, -4.1%, 1st
Pork: 750,000 tonnes, unchanged, 2nd
Source: USDA forecasts |
The drive, which is being accompanied by a succession of import quota cuts from 952,000 tonnes in 2009 to 550,000 tonnes in 2012, has alarmed many foreign producers, including the US, which has effectively been barred from the market.
Russia two weeks ago introduced a ban on meat processed with chlorine treatments, America's default method of cleaning poultry carcasses.
Russia has historically been America's main poultry export market, with trade estimated at $800m in 2008.
Capacity investment
Cherkizovo is undertaking considerable investment in raising production of pork and, in particular, poultry, with upgrades to egg production, raising and slaughter facilities.
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Selected recent Cherkizovo poultry investment projects
Egg facility (60m eggs a year), $52m.
Slaughter plant (8,000 head per hour), $60m.
Penza capacity increase (extra 36,000 tonnes at end 2010), $100m
Bryansk capacity increase (extra 30,000 tonnes at end 2010), $50m
Source: Cherkizovo |
Poultry output will be "significantly higher" from 2011, chief executive Sergei Mikhailov said.
However, production eased by 2,700 tonnes to 187,000 tonnes last year, because of a decision to lower the intensity of breeding operations as part of an efficiency drive.
A jump to 53,800 tonnes, live weight, in pork production reflected the ramp up of operations to full capacity at newly-built pork farms in Lipetsk and Tambov.
Market reaction
The statement was welcomed by Citigroup analyst Marat Ibragimov as signalling "strong top-line growth".
"The company beat our forecasts on pork and meat processing output volumes and slightly missed our poultry volumes estimates," said Mr Ibragimov, who has a target of $16.00 on Cherkizovo stock, and a "buy" rating.
"The aggregate top line looks to be in line with our forecasts and about 5% above consensus estimates."
The shares closed $1.54 higher at $14.79 in London.
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