Russian meat firm Cherkizovo forecast on Wednesday a «very challenging year» due to high grain prices after posting a 66 percent rise in 2012 earnings.

The company, a major producer of poultry and pork, reported a rise in 2012 net profit to $225.2 million from $135.9 million in 2011, helped by higher sales and cost savings.

The group also benefited from direct and indirect subsidies from the state, including profit tax breaks for agricultural enterprises and interest rate reimbursement.

But the combination of grain prices «at historical highs and pork prices at historical lows» will negatively affect the company’s performance in 2013, Chief Executive Sergei Mikhailov said in a statement.

Cherkizovo said government support will be key in 2013, including direct grants to agricultural enterprises — a measure it said is currently under consideration.

The company’s revenues were up 7 percent in dollar terms last year to $1.58 billion, while increasing by 14 percent in roubles as it expanded production capacity...