Russian Aquaculture, the biggest player in Russia’s fish farming sector, saw a slight sales decrease in 2020 that it attributes to difficult weather – but the company is optimistic about 2021.
The company said it has laid the groundwork for future growth by increasing biological assets, capex, and streamlining its trade operations through direct contracts with processors and retail.
The company’s revenue in 2020 was RUB 8.3 billion (USD 112.2 million, EUR 92.4 million), down 5.3 percent from last year. Its salmon segment experienced a decrease of 9.7 percent, to RUB 4.9 billion (USD 66.2 million, EUR 54.5 million); while its trout segment performed roughly the same as 2019 and achieved sales of RUB 3.31 billion (USD 44.8 million, EUR 36.9 million).
In volume terms, the company sold 15,510 metric tons (MT) in 2020, against 16,967 MT a year previously.
The company’s profit after fair value adjustment related to biological assets was RUB 3.8 billion (USD 51.4 million, EUR 42.3 million) in 2020, compared with RUB 4.62 billion (USD 62.5 million, EUR 51.4 million) a year previously. Net profit increased by 3.1 percent, to RUB 3.36 billion (USD 45.4 million, EUR 37.4 million) due to higher prices for fish.
Russian Aquaculture CEO Ilya Sosnov called the results “strong” despite the drop in sales. He said that the decline in revenue was caused by “the delayed start of the harvesting season in 2020 due to an unseasonably cold spring and summer.”
That delayed start may end up being offset this year as “the harvest was partially moved to 2021,” according to Sosnov. The move, he said, is reflected “in the growth of biological assets, which reached record levels.”
Another reason for the company’s optimism came from its efforts to grow assets and find other lanes to better profitability. The company acquired two new farming areas, and received an option to increase its stake in processing plants Tri Ruchya and Murmanrybprom to 100 percent. The deals reflect the company’s desire to turn into “the largest vertically integrated player in the aquaculture industry,” according to Sosnov.
The company also received support recently for a new salmon and trout smolt hatchery in the Russian Arctic, after Russian Prime Minister Mikhail Mishustin signed a decree supporting it and five other investment projects in the Russian Arctic.
The company also appears to be poised for further acquisitions, or other expansion plans, as the company placed three-year bonds totaling RUB 3 billion (USD 40.54 million, EUR 33.38 million) in March 2021.
Other important moves by the company in 2020 were direct supply contracts with leading chains and processors, and launching its new brand Inarctica for ultra-fresh fish.
The company’s strategic aim is to reach an annual production of 35,000 MT of fish by 2025.
