June 8, 2010 10:15
OJSC "Russian Sea Group" (the "Company" or the "Group"), a leading Russian consumer food company, specializing in the production, sale and distribution of branded ready-to-eat fish & seafood products, and the sale and distribution of chilled and frozen fish & seafood products, today announces its 1Q 2010 results, based on unaudited management accounts, reports with reference to Russian Sea.
The volumes and demand volatility of the year 2009 has continued into the 1st quarter of 2010. The consolidated revenue (in Russian Rubles) of the Group decreased by 9.6% to RUR 3 936 million in the first quarter 2010 from RUR 4 352 million in the first quarter 2009.
In the Ready-to-Eat Segment sales increased by 0.8% to RUR 937 million in the first quarter of 2010 compared to RUR 930 million in the first quarter of 2009. The growth was escalating from month to month with the January 2010 being 32% behind January 2009, while sales in February 2010 were 11% higher and in March 19% higher than in the relevant periods of 2009. In the Ready-to-Eat segment the physical volumes in Q1 2010 compared to Q1 2009 have dropped by 6.7% with the average price increasing by 12.2% in the same period, indicating our product mix shift towards higher ticket products, such as salmon and red caviar.
Sales in Chilled and Frozen Segment decreased by 11.9% to RUR 3 452 million in the first quarter of 2010 compared to RUR 3 920 million in the first quarter of 2009, driven primarily by the substantial lack of trout supply from Norway. At the same time, the sales in March 2010 increased by 26% compared to February 2010. In the Chilled and Frozen segment the physical volumes in Q1 2010 compared to Q1 2009 have decreased by 9.8% with the average price decreasing by 2.3% in the same period, driven by the lack of Norwegian trout, one of the most expensive products in our portfolio.
Dmitry Dangauer, the Company CEO, has commented on the Company results and current priorities:
"We are currently building the system that would allow us to increase the sales substantially in the 2nd Half of 2010. In the Ready to Eat segment we are increasing our merchandizing efforts, building exclusive sales teams in the regions, improving our work with the modern trade retail. As we have started rebuilding our sales system just few months ago, it requires some time for the system to start working and to bring substantial sales growth. We expect to see the results of these measures in the high season that will last from September to December 2010 and that will as usually bring a very significant part of the segment sales and the majority of segment EBITDA. At the same time we are in the planning and design phase of the new production and warehouse facility that would allow us to enter into the new product categories, such as ‘surimi' crab sticks and ready-to-cook products.
In the Chilled and Frozen segment we have suffered from the severe deficit of the Norwegian trout that has traditionally provided us a significant portion of our revenues and margin. We are now working on restoring the trout supplies, as well as replacing the missing trout volumes by other fish species. As both processes have certain lead-time, we will be able to substitute the lost trout volumes by Q3 2010. At the same time, we are continuing other sales increase initiatives, such as regional expansion and launch of individually packaged chilled and frozen fish. As a part of these initiatives, we are continuing to build regional distribution network, which already has 10 regional sales representatives, compared to 3 we had by the end of last year. We have already developed samples of individually packaged chilled and frozen fish, which we will introduce to the retail over the summer 2010.
Overall, we are currently working to stabilize the volatility in the company sales, that continues from the last year. From the 2nd half of the year 2010 we expect these measures to bring results and realize into increasing sales volumes and profitability".
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