Moscow, Russia-based Russian Aquaculture reported strong sales and revenue growth in Q3 and through the first nine months of 2021.
On 3 December, the company – which specializes in farming Atlantic salmon in the Barents Sea in Russia’s Murmansk region and lake trout in the Republic of Karelia – announced unaudited financial results for the third quarter and the first nine months of this year ending 30 September.
All key operating and financial metrics, including sales volume, revenue, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) and net profit for nine months of 2021 exceeded the company’s full-year performance in both 2019 and 2020, Russian Aquaculture said in a press release. Revenue rose 73 percent year-on-year to RUB 9.7 billion (USD 131.2 million, EUR 116.2 million), while adjusted EBITDA increased by 52 percent to RUB 3.9 billion (USD 52.8 million, EUR 46.7 million). The company’s adjusted EBITDA margin was 40 percent and its net profit rose 117 percent to RUB 4.8 billion (USD 64.9 million, EUR 57.5 million).
A strong production and marketing performance and consistent growth in sales allowed Russian Aquaculture to increase its market share from 13 percent in September 2020 to 16 percent in September 2021. Its sales of finished products were 18,000 MT, up 75 percent year-on-year during the first nine months of 2021.
Improvements in efficiencies also contributed to the financial performance, Russian Aquaculture CEO Ilya Sosnov said in his earnings report. In the third quarter, the Russian Aquaculture’s operating EBIT amounted to EUR 3.00 (USD 3.38) per kilogram, an 18 percent increase year-on-year. An operating EBIT for nine months was EUR 2.10 (USD 2.37) per kilogram, making the company a global leader in this performance indicator, Sosnov said.
Sosnov said strong retail demand from restaurants and hotels was a key a driver of sales. In 2021 through the end of September, the Russian salmon market grew by 45 percent year-on-year, he added.
“We are seeing a steady increase in the consumption of salmon and in demand for quality chilled salmon, which affirms the fundamental appeal of the Russian market and the growth potential for our business. In this regard, we continue to invest heavily in both equipment and production assets,” he said in the release.
As a result of better sales, growth in efficiency, and investments, the company’s net debt-to-adjusted-EBITDA ratio reached 1.72x. As a result, rating agencies NCR and ACRA assigned the company a credit rating of A- with a stable outlook, Russian Aquaculture said. The board of directors recommended that dividends be paid out at RUB 4.00 (USD 0.06, EUR 0.05) per ordinary share for Q3.
The company’s performance exceeded market forecasts, according to Atryom Mikhailin, an analyst at Veles Kapital investment company,
“The results of Russian Aquaculture were better than we expected. The company demonstrated a higher rate of profitability,” Mikhailin said
Mikhailin said with the company’s biomass at 29,800 metric tons (MT) at the end of September, compared with 22,300 MT at the end of September 2020, he expected the company to post even higher sales in Q4 and a better EBITDA, predicting Russian Aquaculture’s revenue could exceed RUB 5.4 billion (USD 73.1 million, EUR 64.7 million). He recommended investors look to sell the company’s shares targeting a price of RUB 455 (USD 6.16, EUR 5.45) per share.
Photo courtesy of Russian Aquaaculture
