Russian Aquaculture has posted strong results in sales and revenue following the 2019 financial year. The company continued its efforts on building a vertical corporate structure encompassing the whole production process, according to its year-end results.
Russian Aquaculture is one of the biggest fish-farming companies in Russia, specializing on Atlantic salmon and trout on its sites in the regions of Karelia and Murmansk in the northwest of the country. Currently, the total capacity of all 34 sites the company has cultivation rights for is 50,000 metric tons (MT) of salmonids.
In 2019, Russian Aquaculture sold 18,070 MT of seafood products, against 6,776 MT in 2018, up 167 percent. This was translated into a 174 percent increase in revenue to RUB 8.8 billion (USD 118.9 million, EUR 109.7 million). Adjusted EBITDA rose by 3.5 times to RUB 3.4 billion (USD 46.4 million, EUR 42.8 million). with net profit increasing by 42 percent to RUB 3.3 billion (USD 44 million, EUR 40.6 million). As a result of boost in sales, the net debt / adjusted EBITDA ratio has reduced to 1.2x, from 3.8x in 2018.
Investments of RUB 2.5 billion (USD 33.8 million, EUR 31.2 million) were spent on enhancing the capacity of the company’s smolt factory, as well as the purchase of second live-fishing vessel and a barge for the mechanical delousing of fish. New cages and other kinds of fish-rearing equipment were also among investment targets.
Commenting the financial results, Russian Aquaculture CEO Ilya Sosnov said that the year 2019 was successful for Russian Aquaculture as the objectives have been achieved.
“Thanks to the systematic implementation of our strategy, we managed to attain a high degree of financial and operational sustainability. We were able to make major investments which were almost completely funded by operating cash flow,” Sosnov said.
This year looks more difficult as the COVID-19 outbreak has complicated global trade, according to Sosnov. Sosnov said it is too early to fully understand how the current coronavirus crisis will affect the business, but said the company was prepared to make changes if the rapidly changing trade situation requires it.
“We have taken all necessary measures and continue to operate as usual, ensuring the continuity of production processes and product deliveries to our customers,” he said. “At the same time, we continue to monitor the situation and are ready to adapt if necessary.”
The company has purchased and donated two ventilators to local hospitals to aid in local efforts to fight the deadly virus in Murmansk.
Long term, the goal of the company’s owners is to gain and maintain status as the largest aquaculture producer in Russia, Sosnov said. Following the purchase of additional company stock in early May 2020, company owner Maxim Yuryevich Vorobyov increased his shareholding to 48.4 percent of the firm. ZPIF Razvitie under the management (D.U.) of OOO SF-Direct Investment, became a new shareholder, acquiring a 9.5 percent stake in the company. The founder of the management company is Ekaterina Anatolievna Chernova, who is a current member of the Russian Aquaculture’s board of directors.
Per the stock offering announcement, the company’s long-term strategy is to become the biggest vertically integrated player in the Russian aquaculture market. This includes the production of feed and stocking material, primary processing, and distribution. Last year, the company successfully transitioned to annual stocking, monitoring the full rearing cycle, the organization of feed supplies, and the successful development of own sales system, it said.
Photo courtesy of Russian Aquaculture
