Russian Sea looking to boost 2013 revenue to 18.5 bln rubles
MOSCOW. July 11 (Interfax) - The company group OJSC Russian Sea plans to increase its sales revenues 16% to 18.5 billion rubles this year, according to a report by RMG analyst Ksenia Arutyunova that cites Russian Sea management.
The company forecasts that the lion's share of the revenue - 18.2 billion rubles - will be generated by its main distribution business represented by CJSC Russian Fish Company. Sales in the aquaculture segment (Russian Sea - Aquaculture LLC) could increase 4.5-fold this year, although its contribution to consolidated sales revenues will remain at around 1%. This segment's income could increase dramatically in 2015-2016, the report cites the group's general director, Dmitry Dangauer, as saying.
The company forecasts 2013 earnings before interest, taxes, depreciation, and amortization (EBITDA) at 568 million rubles and its EBITDA margin at 3%.
Russian Sea's sales revenues last year, not counting ready-to-eat product maker CJSC Russian Sea, which was sold to the Belarusian outfit Santa-Bremor this past March, were up 2.8% at 16.008 billion rubles.
EBITDA contracted to 62.7 million rubles from 430.9 million rubles in 2011. Net losses amounted to 102.3 million rubles.
The sale of CJSC Russian Sea, whose 2012 sales revenues were down 12% at 3.56 billion rubles, fetched $52 million. The group put the proceeds from the sale into paying down debt.
The Russian Sea group's sales revenues from ongoing activities increased 20.6% to 7.2 billion rubles in the first half of this year. Factoring in CJSC Russian Sea, revenues were up 3.4% at 7.8 billion rubles.
Aquaculture
The business of cultivating fish has the potential to be high-margin, although its development could take several years, Arutyunova said in her report. Russian Sea harvested 878 tonnes of trout from its pens last year, and that figure could go up to 2,500 tonnes in 2013.
Russian Sea also grows salmon. The first harvest is planned for next year, when the company is looking to realize more than 3,000 tonnes of the fish.
Last month, Russian Sea opened another salmon farm in the Barents Sea with production capacity of 5,000 tonnes. The company plans next year to open another three fish-farms with combined capacity of over 15,000 tonnes next year.
The overall production capacity of Russian Sea's 29 fish-farm sections amounts to 70,000 tonnes of trout and salmon, making it possible for the company to command up to 25% of the market for refrigerated red fish in Russia, the RMG report says.
At present, just 10% of the salmon on the Russian market is supplied by Russian companies, so Russian Sea could see benefit from a lower cost of sales, the analyst reckons.
"Russian Sea's financial indicators are subject to wide fluctuation due to high dependence on the price of fish on the international market, as distribution income is tied to imports. The breeding segment should substantially improve profitability and provide the business with needed stability in the middle and long-term periods," Arutyunova writes.
Russian Sea was set up in 1997. It had its initial public offering (IPO) in April of 2010, during which investors bought 18.9% of shares for $90 million, although the original offer volume was planned at $130.2-$173.5 million.
In September 2011, Gennady Timchenko's fund Volga Resources became the owner of 30% of the company's stock via a joint venture with existing shareholder RS Group, controlled by chairman of the Russian Sea board of directors Maxim Vorobyev. Half of the joint venture - Rsea Holdings Limited, which holds 60.9% of Russian Sea's shares - belongs to RS Group, and the other half belongs to wholly owned subsidiary Volga Resources.
Russian Sea ended 2012 with a net loss to International Financial Reporting Standards (IFRS) of 102.3 million rubles, after turning a 131-million-ruble profit the year before. Revenues were up 2.8% last year to 16.008 billion rubles.
