Russia’s largest salmon farming company, Russian Aquaculture, saw a 44 percent jump in operating profit in the first half of the year, and is using its financial strength to expand to as much as 35,000 metric tons within the next six years.
Operating profit jumped by 15.9 times to RUB 4.854 billion (€65.9 million/$73.1 million) as the company continued its vertically integrated expansion.
Salmon production volumes skyrocketed by more than 12 times through June compared with the same period of 2018 to 9,637 metric tons, the company reported.
Earnings before interests, taxes, depreciation and amortization (EBITDA) grew 44 percent to RUB 2.1 billion (€28.5 million/$31.6 million), while EBITDA for the last 12 months reached RUB 3.1 billion (€42.7 million/$47.4 million).
Commercial biomass increased 58 percent due to annual fish stocking over the last three years, and reached 11,721 metric tons.
Russian Aquaculture has been steadily profitable over the past three years, with net profit in the first half showing a more than a six-fold increaseto RUB 1 billion (€13.6 million/$15.1 million). Net profit for 12 months amounted to RUB 3.1 billion (€42.7 million/$47.4 million).
The company's net debt as of June 30 amounted to RUB 3.1 billion (€42.7 million/$47.4 million), down 16 percent from the end of 2018.
In the first half, Russia Aquaculture’s capital investments amounted to RUB 1.4 billion (€19 million/$21.1 million). By the end of 2019, the company expects investment volume to exceed RUB 2.5 billion (€33.9 million/$37.6 million).
Ilya Sosnov, CEO for Russian Aquaculture CEO said the company has set ambitious targets of 30,000 to 35,000 metric tons by 2025.
“We already now have the number of hatchery sites necessary to achieve these figures," he said.
Russians still love salmon
The Russian salmon market is on a steady growth path. In 2018, the value of the domestic farmed salmonid market amounted to RUB 50 billion (€678.8 million/$752.8 million), or around 100,000 metric tons in volume, significantly exceeding the forecast figures.
“The share of Russian Aquaculture in 2019 is expected to be at the level of 17 percent to 20 percent of the total," Sosnov said.
The company is planning to produce up to 20,000 metric tons of farmed salmon by the end of 2019.
Russian Aquaculture is the only in Russia company farming Atlantic salmon. The company has 49 sites for salmon and trout farming in the Barents and the White Seas and in Karelia, with annual potential production capacity of around 50,000 metric tons of salmonids.
The long-term development strategy of the company involves the creation of the largest vertically integrated holding in the aquaculture segment, including its own production of feed and broodstock, primary processing and distribution.