Russian chicken and pork producer Cherkizovo said growth in poultry prices would be negligible in 2012, casting a shadow over first quarter profit figures that came in.
The company, which has warned repeatedly that prices of its products will come under pressure following Russia's entry into the World Trade Organisation, said pork had held up in the first quarter but poultry had been disappointing.
Chief Executive Sergey Mikhailov said in a statement that Cherkizovo sees poultry prices are growing very slowly and do not expect significant price growth in 2012. Nevertheless the company remains confident about the future of the poultry market and continue to invest in poultry production.
Cherkizovo shares, which are down 14% in the year to date, dropped 5% in early trade but recovered to be down 2.5% by 0657 GMT.
The company said its first quarter net profit more than doubled to $39.3m, beating market expectations, as growth in capacity fed through to the bottom line.
Analysts had expected the net income figure to come in at $35.7 million.
First quarter revenue increased 16% on a dollar basis to $357.8m, while the group's gross margin increased to 26% from 21% in the same period last year.