Russian Aquaculture announces higher revenues, lower biomass in H1 2020

Published on
September 1, 2020

Moscow, Russia-based Russian Aquaculture has reported higher revenues, but lower biomass in its financial results for the first half of 2020.

The company, which farms Atlantic salmon and sea trout in the Barents Sea in the Murmansk region and trout in the lakes of the Republic of Karelia, reported RUB 5.26 billion (USD 71.5 million, EUR 59.6 million) in revenue for the six months ending on 30 June, 2020, up from RUB 4.85 billion (USD 65.9 million, EUR 55 million) in the same period last year. Its operating cash flow increased to RUB 2.4 billion (USD 32.6 million, EUR 27.2 million), up from RUB 2.1 billion (USD 28.5 million, EUR 23.8 million) in H1 2019. And the company’s sales volume increased to RUB 9.6 billion (USD 130.4 million, EUR 108.9 million) from RUB 9.4 billion (USD 127.7 million, EUR 106.7 million) in the same period of 2019.

However, the company recorded a net loss of RUB 402 million (USD 5.5 million, EUR 4.6 million) in H1 2020, compared to a profit of RUB 1 billion (USD 13.6 million, EUR 11.4 million) in H1 2019. The company the loss to a revaluation of biological assets. As of 30 June, 2020, some fish had not reached marketable weight due to low water temperatures in 1H 2020, it said. However, it said July and August had more favorable temperature conditions, resulting in stronger fish growth.

“The company faced two serious challenges in the first half of the year: market disruptions amid the pandemic and unfavorable climatic conditions,” Russian Aquaculture CEO Ilya Sosnov said. “Thanks to dedicated teamwork and a rapid response to changes in the market, however, we delivered strong operating results, maintained business stability and demonstrated solid growth in revenue, adjusted EBITDA, and cash flow.”

Sosnov said he was happy to see the company increase its sales volume, despite the decrease in demand for fresh fish amid uncertainty in the first months of the pandemic.

“This was largely the result of the company’s strategic advantages in terms of the freshness and quality of its fish due to its proximity to sales markets,” he said.

Sosnov said he was happy that the company’s earnings before interest, taxes, depreciation, and amortization rose to RUB 2.3 billion (USD 31.3 million, EUR 26.1 million) from RUB 2.2 billion (USD 29.9 million, EUR 25 million) a year ago. That and its 23 percent reduction in net debt, to RUB 3.1 billion (USD 42.2 million, EUR 35.2 million), allowed Russian Aquaculture to invest RUB 1.2 billion (USD 16.3 million, EUR 13.6 million) in reinvestments into infrastructure and other improvements, Sosnov said.

Sosnov also announced a share buyback program, which will see the company purchase up to RUB 600 million (USD 8.2 million, EUR 6.8 million) in shares by 30 June, 2021, “in order to distribute capital among shareholders and support its share price.

“The repurchased shares will be used for general corporate purposes, including a long-term employee incentive program, as well as for possible share redemption,” he said.

Sosnov also reported a nearly tenfold increase in the liquidity of the company’s shares on Moscow Exchange, with its average daily trading volume in July reaching 133,000 shares, up from 8,000 a year prior.

“Our shareholder base also grew to more than 6,000 shareholders at the end of July, which I consider the best evidence of the company’s investment appeal,” he said. “We value investor confidence, and we will continue to pursue our long-term strategy to create one of the world’s largest vertically integrated players in the aquaculture segment.”

Russian Aquaculture has implemented a number of measures to combat the coronavirus at the company, including the issuance of personal protective equipment, monitoring of the health of employees, and frequent sanitization of all of its facilities.

“Given the ongoing high degree of market volatility, the Company is optimizing costs and prioritizing financing for employee safety and business continuity,” Sosnov said.

Photo courtesy of Russian Aquaculture

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