“The development of the Russian market for chilled red fish is only gaining momentum”.
In a press release, Russian Aquaculture – which farms Atlantic salmon and sea trout in Barents Sea in the Murmansk region as well as the lakes of the Republic of Karelia – posted its financial results for the first half of 2019.
Operational profit before fair value adjustment of biological assets/biomass for 12 months (1 July 2018 to 30 June 2019) was RUB 568 million (EUR 7.6 million).
The company wrote that in terms of operating EBIT/kg of products sold (a generally accepted measure of production efficiency in the aquaculture business), Russian Aquaculture had one of the best results in the industry in H1 2019: RUB 200/kg (EUR 2.7/kg).
As a strategy for further growth, it wants an increase in capacity for rearing juveniles and the acquisition of cages, new vessels, and additional hatcheries. The volume of capital investments in H1 2019 amounted to RUB 1.4 billion (EUR 18.9 million).
The company is expecting investments of more than RUB 2.5 billion (EUR 33.8 million) by the end of the year.
Russian Aquaculture CEO Ilya Sosnov said: “The first half of 2019 was an important milestone for our company. As we wrap up this reporting period, we have, in effect, three generations of fish in the water, that is, the full cycle. Following our SPO in 2017, we attracted investments in order to carry out an extensive capital investment programme focused on transforming Russian Aquaculture into a vertically integrated business that controls every aspect of value creation: from raising our own juvenile fish, through the operation of cages and our own fleet, to direct sales.
“Stable cash flow has enabled the company to invest in expanding its capacity to 30–35 thousand tonnes of fish production per year 2025. Moreover, the company already has the necessary hatcheries to achieve these plans.
“Globally, we see growing interest on the part of investors in aquaculture companies, which is accompanied by an increase in the market capitalisation of major players around the world. The development of the Russian market for chilled red fish is only gaining momentum; we expect continued growth in demand for our products, which are unique in terms of their freshness and other features.”
According to previously announced plans, the company expects to produce about 18–20 tonnes of fish by the end of 2019.