News

RUSSIAN AQUACULTURE PJSC ANNOUNCES ITS IFRS FINANCIAL RESULTS FOR 2018
18.04.2019

16 April 2019, Moscow. Russian Aquaculture PJSC (hereinafter “Russian Aquaculture” or “the Company”), a major Russian salmon aquaculture company is announcing its IFRS results for 2018.

According to Ilya Sosnov, CEO of Russian Aquaculture: “Our key 2018 results are: farming and successful trading of fresh sea trout on a growing salmonids market in Russia; enhancement of a value chain by investing in a fish processing business; securing financing for further development strategy. The Consolidated Net Income has grown 6-fold”.

BUSINESS AND FINANCIAL HIGHLIGHTS

tons

2018

2017

%%

Sales volume

6 776

10 222

-34%

Biomass as of end of period

17 156

5 037

3,36х

 

 

 

 

mln RUB

2018

2017

%%

Sales

3 212

5 022

-36%

Operating profit

1 009

890

13%

Gross profit

3 048

1 092

2,8х

Net profit for continuing operations

2 291

376

6,09х

Adjusted EBITDA[1]

974

2 061

-53%

Operational EBIT

809

1 824

-56%

Operational EBIT, RUR/kg

119

179

-33%

Operational EBIT, NOK/kg

16

25

-39%

In 2018 the Company achieved significant growth of biomass (17.2 thousand tons as of the end of the year).

The volume of harvest and sales declined from 10.2 tons in 2017 to 6.8 tons in 2018 due to the fact that the Company did not stock the Murmansk sites in 2016.

However, since the Company stocked the sites in 2017 and 2018, a major share of biomass (mostly fish stocked in 2017) reached the marketable weight as of 31 December 2018 and was valued at fair value. Profit from such revaluation of biological assets increased from 202.4 mln RUR as of 31 December 2017 to 2,039.3 mln RUR as of 31 December 2018.

Operating EBIT (RUR/kg) declined from 178.5 in 2017 to 119.4 RUR/kg in 2018 due to lower 2018 sales paired with a stable level of period costs.

KEY BALANCE SHEET FIGURES

mln RUR

31.12.2018

31.12.2017

%%

Non-current assets

3 817

2 271

68%

Biological assets

6 051

1 703

3,56х

Trade and other receivables, net

345

25

13,65х

Advances paid to suppliers, net

226

278

-19%

Cash and cash equivalents

105

1 094

-90%

Current assets

7 136

3 307

2,16х

TOTAL ASSETS

10 953

5 578

96%

Equity

6 003

3 514

71%

Long-term loans and borrowings

3 618

1 133

3,2х

Non-current liabilities

3 669

1 184

3,1х

Short-term loans and borrowings

684

704

-3%

Current liabilities

1 281

880

45%

TOTAL LIABILITIES

10 953

5 578

96%


Key Financial Indicators

In 2018, the Company ramped up its assets significantly. The Company’s financial stability was improved due to the growth of its own capital and reserves, and financing of the Company’s growth by long-term funding sources.

The most significant improvement in 2018 is the increase of biomass in the Barents Sea sites and the corresponding increase in the value of biological assets from 1,702.6 mln RUR at the end of 2017 to 6,050.8 mln RUR at the end of 2018.

During 2018, the Company financed the purchase of equipment for stocking in the Barents Sea and a second bulk carrier for feed provision, which produced the increase in the value of fixed assets on the balance from 2,018.1 mln RUR as of 31 December 2017 to 3,064.9 mln RUR as of 31 December 2018.

Most of the increase in biomass, the harvesting and sale of which began in the second half of 2018, was financed by long-term loans, and as of 31 December 2018 net debt amounted to 3,747.5 mln RUR (including restricted cash - 450.0 mln RUR) compared to 742.5 mln RUR as of 31 December 2017.

The Сompany optimized its loan portfolio by means of reducing the weighted average interest rates and increasing the proportion of long-term loans and borrowings from 26% to 84%.

In line with its strategy of becoming a vertically integrated holding, the Company acquired a 40% share in the group of fish processing companies in November 2018.

In 2018 the Company bought from the auction 6 fish farming sites in the Barents Sea, laying the basis for further strategic growth.

In a subsequent period of 1st quarter 2019, the Company carried out the planned harvesting of fish that had reached the harvested size. The corresponding proceeds were used to finance capital investments and repay debt. Net debt as of 31 March 2019 was reduced to 3,136.6 million RUR (including restricted cash of 450.0 mln RUR).

ABOUT THE COMPANY

Russian Aquaculture PJSC is the managing company of the Group and is one of the leaders in the segment of Atlantic salmon and trout production in Russia.

Key activities of the Group managed by the Company include:

  • commercial farming of Atlantic salmon in the Barents Sea in the Murmansk region ;

  • commercial farming of trout in the Republic of Karelia’s lakes.

Russian Aquaculture’s core strategic focus is on growing its aquaculture business. Today, the Group managed by the Company owns the rights to 49 sites for salmon and trout farming. The total potential production volume for these sites is around 50 ths tones of red fish.

The long-term development strategy implies moving towards the creation of the largest vertically integrated aquaculture player in Russia, including own feed and smalt production facilities, primary processing and own distribution.

[1] Management of the Group determines adjusted EBITDA as the sum of the following indicators:

  • Profit/ (loss) before tax per year;

  • (Gain)/ loss on exchange, net;

  • Interest (income)/ costs, net;

  • Depreciation of fixed assets and intangible assets;

  • (Profit) / loss from revaluation of biological assets;

  • Loss from sale of shares to employees at preferential terms.