News

RUSSIAN AQUACULTURE ANNOUNCES IFRS FINANCIAL RESULTS FOR 2017
12.04.2018

Moscow, 12 April 2018. PJSC Russian Aquaculture (the “Company”), Russia’s largest commercial fish producer (aquaculture), announces its IFRS financial results for the year ended 31 December 2017.

Russian Aquaculture CEO Ilya Sosnov said: “2017 was a landmark year for the Company: strong operating cash flow and proceeds from SPO allowed us to significantly reduce net debt and increase equity capital.”

KEY OPERATING AND FINANCIAL RESULTS

tonnes

12 months ended 31 December

2017

2016

Change

Sales volume

10,221.8

5,313.4

92.4%

Biomass of fish in the water at end of period

5,037

10,561

(52.3%)

RUB mln

 

 

 

Revenue

5,022.1

2,475.5

102.9%

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

(1,514.4)

(54.6)

27.7х

Operating profit

889.8

1,094.3

(18.7%)

Fair value gain on biological assets

202.4

1,738.7

(88.4%)

Operating EBIT[1]

1,824.2

876.9

208.0%

EBIT/kg

178.5

165.0

8.2%

Adj. EBITDA[2]

2,061.4

1,510.8

36.4%

Net income from continuing operations

376.3

2,133.1

(82.4%)

Operating cash flow from continuing operations

2,441.0

(160.7)

-

 

Overview of financial results

  • In 2017, the Company’s revenue more than doubled and amounted to RUB 5.0 billion, as the production cycle started at the end of August 2016 reached the stage of harvesting and selling commercial products.

  • Adjusted EBITDA increased by 36.4% to RUB 2.1 billion. Adjusted EBITDA margin amounted to 41%.

  • The Company has continued to direct most of its income towards reducing debt levels, and as of 31 December 2017, net debt amounted to RUB 742.4 million compared with RUB 3,166.1 million on 31 December 2016. Net debt/adj. EBITDA was 0.36x at the end of 2017 compared to 2.09x on 31 December 2016.

  • Operating EBIT/kg of products sold (a generally accepted measure of production efficiency in the aquaculture business) for FY 2017 was RUB 178.5/kg, in line with global leaders in the industry, and up 8.2% year-on-year.

  • Net profit was affected by the lack of stocking 2016 and the corresponding revaluation of biological assets. This one-off factor, which affects the Company’s performance in 2017-2018, will be eliminated by the end of 2018 with the completion of the 2017 stocking cycle.

  • The Company’s ambitious plans for stocking in 2018 are already well underway, with contracts for the purchase and supply of fry and smolt already in place, and financed by more than 40% as of 31 December 2017.


BALANCE SHEET HIGHLIGHTS

RUB mln

As of

    31.12.2017

31.12.2016

Change

Non-current assets

2,239.5

1,735.6

29.0%

Biological assets

1,702.6

3,353.8

(49.2%)

Trade and other receivables, net

25.3

314.5

(92.0%)

Advances paid to suppliers, net

277,8

348,5

(20.3%)

Cash and cash equivalents

1,094.1

33.9

3,127.4%

Current assets

3,307.2

4,209.4

(21.4%)

TOTAL ASSETS

5,546.7

5,944.9

(6.7%)

Capital and reserves

3,513.8

2,366.7

48.5%

Long-term loans and borrowings

1,132.9

346.9

226.6%

Non-current liabilities

1,152.4

346.9

232.2%

Short-term loans and borrowings

703.7

2,853.1

(75.3%)

Short-term liabilities

880.5

3,231.3

(72.8%)

TOTAL LIABILITIES

5,546.7

5,944.9

(6.7%)

 

Balance sheet overview

  • The most significant change in the financial position of the Company in 2017 was due to the sale of most of the commercial product of the farms in the Barents Sea and a corresponding reduction in the value of biological assets.

  • The Company significantly optimised its remaining debt portfolio by lowering the weighted average interest rate and increasing the share of long-term loans and borrowings from 11% to 62%.

  • The Company has substantially reduced the weighted average effective interest rate on loans and borrowings to 5.37% in 2017, compared to 9.02% in 2016.

  •  In 2017, the Company acquired 2 smolt plants in Norway, contributing to its transformation into a vertically integrated holding, and also allocated over RUB 470 million for the purchase of new production equipment.

  • In December 2017, the Company won the right to five fish farms in the Barents Sea, creating a base for further growth in line with its strategy.

 

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 43 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.



[1] The financial results for FY 2016 are presented on a pro forma basis, excluding the contribution from the Company’s former subsidiary Russian Fish Company

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

• profit/(loss) before tax for the year

• foreign exchange gain/(loss)

• interest income/expense, net

• depreciation of fixed assets and amortisation of intangible assets

• fair value profit/(loss) on revaluation of biological assets