August 23, 2018 / 11:54 AM / a year ago

UPDATE 1-Russia's Cherkizovo posts earnings jump on valuation gain

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MOSCOW, Aug 23 (Reuters) - Russian poultry and pork producer Cherkizovo Group said on Thursday its net profit jumped 70.5 percent year on year in the first half of 2018, boosted by an asset valuation gain.

* Net profit totalled 8.7 billion roubles ($130 million), up from 5.1 billion roubles a year earlier, it said in a statement;

* The company recorded a net change in fair value of its biological assets and agricultural produce of 7 billion roubles, compared with 1.2 billion roubles in the first half of 2017;

* “A higher net change in fair value of biological assets and agricultural produce is explained by a higher valuation of sows, market hogs, and accounting for the upcoming harvest, and by higher prices of the products that the group produces,” Cherkizovo said.

* First half adjusted EBITDA (earnings before interest, taxation, depreciation and amortisation) fell 14 percent year on year to 7 billion roubles due to a lower profitability in poultry and meat processing segments;

* Revenue grew 5.1 percent year on year to 45.5 billion roubles thanks to higher sales volumes on the back of lower selling prices which supported consumption;

* Cherkizovo also said the underlying consumer demand was robust, supported by stable real disposable incomes and a temporary consumption boost from the soccer World Cup;

* In the second quarter, net profit rose 81.4 percent year on year to 5.8 billion roubles, adjusted EBITDA fell 3.1 percent to 4.3 billion roubles, while revenue was up 5.5 percent to 23.6 billion roubles. Source text for Eikon: Further company coverage: ($1 = 66.9725 roubles) (Reporting by Moscow Newsroom Editing by Edmund Blair)

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