4 Sep 2009 14:37

Wimm-Bill-Dann Foods cuts H1 earnings 17.4% to $64.9 mln

MOSCOW. Sept 4 (Interfax) - Wimm-Bill-Dann Foods (WDB) , one of Russia's largest diary and juice companies, saw its net profit to US GAAP fall 17.4% year-on-year in the first half of 2009 to $64.9 million, the company said in a press release.

This was better than analysts had predicted.

The company's sales revenue in the first half fell by 28.2% to $1.0715 billion from $1.492 billion in the same period of 2008. EBITDA shrank by 13.9% to $158.3 million from $183.8 million while the EBITDA margin increased from 12.3% to 14.8%. An earlier consensus forecast of analysts put sales revenue higher at $1.0969 billion and EBITDA lower at $155.4 million.

During the second quarter of 2009, the company's net profit increased by 42.6% to $52.3 million from $36.7 million in the same period of 2008. Sales revenue in the second quarter dropped by 27% to $554.6 million from $706.1 million, EBITDA - down 8.5% from $93.1 million to $85.2 million and EBTIDA margin - up from 12.2% to 15.4%.

The company's operational profit in the first half of the year dropped by 11.3% to 111.8. In sales revenue, this figure accounted for 10.4% in the first half of this year, up from 8.4% the same period of the previous year.

The press release said that largest decrease in sales revenue was posted for its Milk segment, down 32.5% in the first half to $746.7 million from $1.105 billion in the same period of 2008. The company said that drop was the negative result of the ruble's changing rate against the dollar. This was partially compensated by improvements in the company's commercial production.

The average factory price in dollar dropped by 23.2% to $1.07 per kilogram in the first half against $1.4 per kilogram in the same period of 2008. The gross margin in this segment increased from 28.3% to 30.3% owing to a decrease in production costs and improving WBD's item range.

In the second quarter of 2009, the gross margin increased to 31.4% from 30.1% in the same period of 2008.

Sales revenue generated by the company's Beverages segment dropped by 19% to $209.9 million in the first half of 2009 from $259 million posted in the same period of 2008. The decrease was driven by the changing rate of the ruble against the dollar but was partially compensated by stable growth in product sales, the company said.

The average factor price in dollar fell by 24% to $0.74 per liter in the first half from $0.98 per liter in the same period of 2008. The gross margin for the Beverages segment increased from 38% to 38.8%, respectively. The company said this was the result of improving efficiency and the declining cost of concentrates.

In the second quarter, the gross margin for the segment increased to 40.4% from 38% posted in the same period of last year.

The lowest decrease in sales revenue was posted by the Baby Food segment, which came to 10% to $114.9 million from $127.7 million in the first half of 2008. The company said the decrease had been the result of the negative change in the ruble's rate, which was partially compensative by stable product sales growth.

The average factory price in dollar decreased by 28.7% to $1.72 per kilogram in the first six months of 2009 against $2.42 per kilogram in the same period of 2008. The gross margin for the segment increased by 48.6% from 46.7%.

Wimm-Bill-Dann Foods, one of the leading producers of dairy and juice products in Russia, was formed in 1992 and includes 36 plants in Russia and the CIS, as well as affiliates in 26 cities.

France's Danone owns an 18.36% stake in the company. More than 30% of WBD shares are traded on the NYSE as ADR.

WBD increased US GAAP net profit 27.3% to $101.7 million in 2008. Sales revenue grew 15.8% to $2.82 billion, EBITDA increased 20.1% to $361 million and the EBITDA margin rose to 12.8% from 12.3%.