RUSSIAN SEA GROUP announces revenue for 6 months ended June 30, 2010

September 1, 2010 13:26

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, announced its Revenue for the six months of 2010, based on unaudited management accounts, reports with reference to Russian Sea.

The consolidated revenue (in Russian Rubles) of the Group decreased by 12% to RUR 7 280 million in the first six months of 2010 from RUR 8 270 million in the first six months of 2009. The disruption in the supply of salmon and trout and high purchase prices we saw in the first quarter of the year continued further into the second quarter impacting our revenue and margin in both segments.

In the Ready-to-Eat Segment sales decreased by 5.3% to RUR 1 723 million in the first six months of 2010 compared to RUR 1 820 million in the first six months of 2009. In the Ready-to-Eat segment the physical volumes in H1 2010 compared to H1 2009 have dropped by 6.4% with the average price increasing by 1% in the same period.

Sales in Chilled and Frozen Segment decreased by 11% to RUR 6 449 million in the first six months of 2010 compared to RUR 7 247 million in the first six months of 2009, driven primarily by the substantial lack of trout supply from Norway and extremely hot summer. In the Chilled and Frozen segment the physical volumes in H1 2010 compared to H1 2009 have decreased by 11.8% which was partially offset by the average price increase by 1% in the same period.

Dmitry Dangauer, the Company CEO, has commented on the Company results and current priorities:

"These first six months were difficult for our Company due to the deficit of trout, increased competition followed by lower sales and margin. However, we are continuing to work on restoring the trout supplies, as well as replacing the missing trout volumes by other fish species like Russian pelagic fish and Far East humpback salmon. We are building regional distribution network through our sales representatives in the Chilled and Frozen Business. Already 16 sales representatives in Chilled and Frozen Business have been hired and started to work in the regions.

We understand that the current situation in the Group requires changes both in organizational structure and key management. Thus, Alexander Maximov has been appointed as a Head of Ready-to-It segment with previous commercial experience in Pepsico and Lenta. For the last 9 months he led the North-Western regional branch in our Ready-to-Eat segment, the only region that has shown significant sales growth in the last 6 months on YtY basis. He is currently implementing the sales stimulation and margin growth program in both modern and traditional trade channels. We have also appointed new Factory manager and Supply chain manager in order to increase operational efficiency."

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