News

Russian Aquaculture announces 1h 2017 IFRS financial results
06.09.2017

  

PRESS RELEASE 

RUSSIAN AQUACULTURE ANNOUNCES 1H 2017 IFRS FINANCIAL RESULTS

Moscow, 6 September 2017 – PJSC Russian Aquaculture (the "Company"), Russia’s commercial fish producer (aquaculture), announces its interim IFRS financial results for the six months ended 30 June 2017.

INCOME STATEMENT HIGHLIGHTS

RUB mln

Six months ended 30 June

2017

2016

Change

Sales volume, tonnes

6,936.3

833.1

8.3х

Revenue

3,343.4

295.8

11.3х

Biomass of fish in the water at end of period, tonnes

3,308.7

5,326.5

-37.9%

Operating profit

1,651.2

13.8

119.5x

Reclassification of fair value gain on revaluation of fish harvested in the period

-1,240.8

-112.1

11.1х

Fair value gain on biological assets

81.4

455.1

-82.1%

Gross profit

491.7

356.8

37.8%

Other operating income / (expense)

-314.8

-110.2

2.9х

Operating EBIT

1,363.1

-88.0

-

EBIT/kg

196.5

-

-

Operating EBITDA

1,516.0

-55.0

-

Financial expenses

-107.8

-311.2

-65.4%

Net income from continuing operations

57.7

-88.0

-

 

 

 

 

 

Overview of financial results

•      Throughout 1H 2017 the Company continued to harvest and sell commercial biomass grown in 2016. The 1H 2017 sales volume of 6.9 ths tonnes brought revenue for the period of RUB 3.34 billion, compared to 1H 2016 sales volume of 0.8 ths tonnes and revenue of RUB 0.30 billion.

•      Operating EBIT, which is a key indicator of financial performance in the aquaculture industry, was RUB 1.4 billion in 1H 2017, compared to a negative result in 1H 2016. The 1H 2017 operating EBIT margin was 40.8%.

•      Operating EBIT/kg of products sold (a generally accepted measure of the efficiency of production in the aquaculture business) in 1H 2017 was RUB 196.5/kg, in line with global leaders in the industry.

•      In 2016 the Company took an operational decision not to stock smolt in 2016, which led to fish biomass in the water as of 30 June 2017 decreasing by 38% year-on-year. This will not affect the financial sustainability of the Company. The fair value gain on biological assets decreased from RUB 455.1 million for 1H 2016 to RUB 81.4 million for 1H 2017 as a consequence of the fact that most of the fish have yet to reach marketable weight. In such a case, fish is valued based on accumulated cost instead of the potential sale price.

•      As of 30 June 2017, most of the commercial biomass stocked in 2015 had been harvested and sold. As a result, RUB 1,240.8 million of income from the revaluation of biological assets as of 31 December 2016 was reclassified as an expense for 1H 2017.

•      The factors above brought the Company's 1H 2017 net income from continuing operations to RUB 57.7 million, compared to a loss of RUB 88 million in 1H 2016.

BALANCE SHEET HIGHLIGHTS

RUB mln

As of

    30.06.2017

31.12.2016

Change

Non-current assets

1,821.2

1,735.6

4.9%

Inventories

250.9

143.8

74.5%

Biological assets

1,326.4

3,353.8

-60.5%

Trade and other receivables, net

187.9

314.5

-40.3%

Advances paid to suppliers, net

243.3

348.5

-30.2%

Cash and cash equivalents

149.8

33.9

4.42х

Short-term investments

113.0

0.0

-

Current assets

2,297.3

4,209.4

-45.4%

TOTAL ASSETS

4,118.5

5,944.9

-30.7%

Share capital

7,953.8

7,953.8

0.0%

Share premium

654.0

654.0

0.0%

Accumulated deficit

-6,183.4

-6,241.1

-0.9%

Subtotal

2,424.4

2,366.7

2.4%

Long-term loans and borrowings

126.9

346.9

-62.8%

Non-current liabilities

128.9

346.9

-62.8%

Short-term loans and borrowings

1,270.6

2,853.1

-55.5%

VAT and other taxes payable

186.6

240.9

-22.5%

Short-term liabilities

1,565.1

3,231.3

-51.6%

TOTAL LIABILITIES

4,118.5

5,944.9

-30.7%

 

Balance sheet overview

•      The most significant change in the Company's financial position in the first half of 2017 was due to the sale of most of the commercial output from farms in the Barents Sea and the corresponding decline in the value of biological assets.

•      The Company continued to channel most of its income into reducing debt levels: as of 30 June 2017, net debt amounted to RUB 1,247.7 million, compared to RUB 3,166.1 million as of 31 December 2016.

•      Short-term financial investments as of 30 June 2017 includes financing received for the acquisition of a smolt plant in Norway (Villa Smolt AS). The deal was closed on 5 July 2017 with a purchase price of NOK 16.6 million (RUB 117 million). The production technology of Villa Smolt AS is based on a closed water supply system that allows production of both rainbow trout and Atlantic salmon fry. The plant has a license to produce up to 5 million smolt annually. The company plans to receive its first smolt from the plant in 2018.

Russian Aquaculture CEO Ilya Sosnov said:

“The Company continued its sustainable development during 1H 2017.

“As of the reporting date, the Company had completed its stocking for 2017. Total stocking amounted to 1.53 million trout fry and 2.01 million Atlantic salmon fry in Murmansk, as well as 1.17 million trout fry in Karelia. The Company plans to harvest and sell this fish in the 2018-2019 season.

“On 31 August 2017, we completed the harvesting and processing of all commercial salmon that was stocked in Ura-Guba in 2015. The total production volume for this fish was 12.5 ths tonnes, which brought the company over RUB 6.35 billion in revenue (excl. VAT).

“By the end of 2017 we plan to begin harvesting and sale of commercial fish from the Segozero farms, which should enable us to achieve our revenue and operating profit targets for 2017.”

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 farming of Atlantic Salmon in the Barents Sea in the Murmansk region

•      Commercial farming of trout in lakes of the Republic of Karelia

Russian Aquaculture’s core strategic focus is on growing its aquaculture business. The Company currently owns salmon and trout cultivation rights for 30 sites for the farming of salmon and trout. The total potential production volume for these sites is around 50 ths tonnes of red fish.

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

Contacts:

EM

Denis Denisov

Tel.: +7-985-410-3544

E-mail: denisov@em-comms.com

 

Irina Logutenkova

Tel.: +7-910-438-4843

E-mail: logutenkova@em-comms.com

     


This press-release may contain projections or other forward-looking statements with regards 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 shall not update this press release to revise projections or include information about events and other developments that occurred after the publishing 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 risks associated with doing business in Russia, the sudden market changes in the business sectors of the Group, and many other risks specific to the Group and its activities.