News

RUSSIAN AQUACULTURE ANNOUNCES 1H 2021 IFRS FINANCIAL RESULTS
31.08.2021

Moscow, 31 August 2021. Russian Aquaculture PJSC (the “Company”), the largest Russian company in the commercial fish farming (aquaculture) sector, announces its unaudited consolidated IFRS financial results for the six months ended 30 June 2021 (1H 2021).

The Company will hold a conference call at 14:00 (Moscow) / 12:00 (London) today, 31 August 2021. Members of the Company’s senior management team will participate to discuss the financial results.

Results for 1H 2021 and after the reporting date

  • Increased sales volumes. Sales of finished product in 1H 2021 increased by 35% year-on-year.

  • Improved financial performance. Revenue and adjusted EBITDA increased significantly in 1H 2021.

  • Substantial net profit. Net profit for 1H 2021 amounted to almost RUB 2 billion, compared to a net loss of RUB 0.4 billion in the year-ago period.

  •  Successful integration of processing facilities. The processing plant acquired in May is now fully integrated into the Company’s business operations, and functions as an important link in bringing consumers guaranteed fresh, high-quality fish.

  • High level of financial stability. Two ratings agencies, NCR and ACRA, revised the Company’s credit ratings upward to A- on the national rating scale, with a stable outlook. The Company’s net debt / adjusted EBITDA ratio is at a comfortable 1.88x.

  • Investment in business growth. In 1H 2021, the Company invested RUB 2.2 billion in equipment for its farms and to increase its ownership of its processing plant to 100%.

  • Dividends. The Board of Directors recommended distributing net profit at RUB 4 per ordinary share for 1H 2021. Including interim dividends previously announced for Q1 2021, total dividends for 1H 2021 could amount to RUB 8 per share.

  • Expansion of the stock buyback programme. The updated programme calls for the repurchase of up to RUB 900 million in Russian Aquaculture stock. The programme will run through 30 June 2022 or until the repurchase limit is reached.

Key financial results in 1H 2021

  • Net profit totalled RUB 2.0 billion, compared with a loss of RUB 0.4 billion in 1H 2020.

  • Revenue increased by 28% year-on-year to RUB 6.7 billion.

  • Biomass totalled 22.2 thousand tonnes as of the end of 1H 2021, compared with 9.3 thousand tonnes as of the end of 1H 2020.

  • Adjusted EBITDA reached RUB 2.4 billion, up 6% from the previous year. The adjusted EBITDA margin was 36%.

Russian Aquaculture CEO Ilya Sosnov said:

“We grew production volumes considerably in 1H 2021, which had a positive impact on revenue and EBITDA. In addition, thanks to the excellent rate of weight gain of our fish, we delivered net profit of nearly RUB 2 billion.

“Our results in the first half of the year were also supported by growth of the market. The Russian salmon market grew by 50% in the first half of 2021 in volume terms compared with the first half of 2020, and by 47% compared with the first half of 2019. This growth further reinforces our conviction in the fundamental long-term outlook for the Russian fish market and prospects for increasing sales volumes of our fresh, high-quality products.

“We continue to invest in implementing our growth strategy, allocating RUB 2.2 billion during the period to buy processing capacities and equipment for our farms. We have successfully integrated our primary processing plant into all of our business processes, bringing us much closer to our goal of building the largest vertically integrated player in the aquaculture segment.

“Our strong results, combined with a high degree financial stability, enabled the Board of Directors to recommend paying out dividends totalling RUB 352 million based on the results of the first half of the year. Together with dividends for Q1 2021 and FY 2020, we will pay out a total of RUB 1.1 billion in dividends, or RUB 13 per share, this year.”

Financial performance in 1H and 2Q 2021

RUB mln

1H
 2021

1H
 2020

Change

2Q
 2021

2Q
 2020

Change

Sales volume, ths tonnes

13.0

9.6

35%

5.2

3.5

47%

Biomass at the end of the period, ths tonnes

22.2

9.3

140%

22.2

9.3

140%

Sales revenue

6,718

5,255

28%

2,866

1,816

58%

Gross profit before the revaluation of biological assets

2,627

2,287

15%

1,115

806

38%

Gross profit after the revaluation of biological assets

2,919

75

39х

2,543

257

10х

Net profit (loss)

1,961

(402)

-

2,043

(67)

-

Adjusted EBITDA[1]

2,428

2,297

6%

940

691

36%

Adjusted EBITDA margin, %

36%

44%

(8 p.p.)

33%

38%

(5 p.p.)

Operating EBIT[2], RUB mln

2,040

2,057

(1%)

775

632

23%

Operating EBIT, EUR / kg

1.8

2.8

(36%)

1.7

2.3

(26%)

Net operating cash flow

1,767

2,387

(26%)

(411)

606

-


RUB mln

30.06.2021

30.06.2020

Change

Net debt

6,606

3,092

114%

Net debt / adj. EBITDA

1.88x

0.87x

117%


Revenue

In 1H 2021, revenue increased by 28% to RUB 6.7 billion, up from RUB 5.3 billion a year earlier. Revenue growth was driven primarily by a significant increase in sales volumes.

Adjusted EBITDA

Higher sales volumes also helped drive a 6% year-on-year increase in adjusted EBITDA to RUB 2.4 billion, up from RUB 2.3 billion in 1H 2020. The adjusted EBITDA margin was 36%.

Net profit

Net profit was RUB 2.0 billion, compared with a loss of RUB 0.4 billion in 1H 2020, mainly due to the excellent growth rate of our fish, which had a positive effect on the revaluation of biological assets.

Capex and debt

In 1H 2021, the Company invested RUB 2.2 billion, most of which was allocated for farm equipment and the exercise of an option to purchase its fish processing plant. As of 30 June 2021, the net debt to adjusted EBITDA ratio remained at a comfortable 1.88x. In terms of debt structure, long-term borrowings accounted for 56% of debt as of 30 June 2021.


Conference call

The Company will hold a conference call at 14:00 (Moscow) / 12:00 (London) today, 31 August 2021. Members of the Company’s senior management team will participate to discuss the financial results.

The call will take place on Zoom in Russian with the option of choosing simultaneous translation into English.

To participate in the call, click the link, or dial:

https://em-comms.zoom.us/j/85141211809?pwd=Yzc5Y3Ric2lzWW15L0l1MHJVQzVCQT09

Call ID: 851 4121 1809

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ABOUT RUSSIAN AQUACULTURE

Russian Aquaculture is one of the leaders in the production of Atlantic salmon and trout in Russia.

The Company’s core business areas are:

·         commercial Atlantic salmon farming in the Barents Sea in the Murmansk region

·         commercial trout farming in the lakes of the Republic of Karelia

Russian Aquaculture’s core strategic focus is on developing its aquaculture business. The Company currently owns cultivation rights for 39 sites for farming salmon and rainbow trout. The total potential production volume for these sites is around 50,000 tonnes of salmonids.

The Company’s long-term development strategy involves the creation of the largest vertically integrated player in the aquaculture market, including the production of feed and stocking material, primary processing, and distribution of the Company’s own products.

Contacts:

EM

Denis Denisov

Tel.: +7-985-410-3544

Email: denisov@em-comms.com

Irina Logutenkova

Tel.: +7-910-438-4843

Email: logutenkova@em-comms.com

This press release may contain projections or other forward-looking statements with regard to future events or the Group’s future financial performance. Forward-looking statements contain such words as “expected”, “as seen”, “projected”, “according to estimates”, “planned”, “will be”, “could”, “can”, “perhaps” and variations of such expressions (including the negative connotations thereof). Recipients are cautioned that any such statements are only projections and that actual results or developments may differ materially from those projected in any such estimates or other forward-looking statements. The Group does not intend to update this press release to revise projections or include information about events and other developments that occurred after the publication of this document. There are various factors that may cause actual results to differ materially from those anticipated in such forward-looking statements of this press release; this applies, in particular, to the general economic situation, the market environment, the risks associated with doing business in Russia, sudden market changes in the business sectors of the Group, and many other risks specific to the Group and its activities.

[1] The Group’s management defines adjusted EBITDA as the sum of the following indicators:

·             Profit / (loss) before income tax;

·             Foreign exchange gain / (loss), net;

·             Interest (income) / expenses, net;

·             Depreciation of fixed assets and intangible assets, as well as depreciation of right-of-use assets;

·             Profit / (loss) from the revaluation of biological assets;

·             Expense from the sale of shares to employees on preferential terms.

[2] The Group’s management defines operating EBIT as the difference between the following indicators:

·             Adjusted EBITDA;

·             Depreciation of fixed assets and intangible assets, as well as depreciation of right-of-use assets.