OREANDA-NEWS. OJSC “Russian Sea Group” (the “Company” or the “Group”), one of the leading companies on Russian food market, announces its revenue for the 1Q 2013 based on unaudited management accounts.

On 28th of February 2013 the Group finalized a sale of its 100% subsidiary, CJSC “Russian Sea”, to a strategic investor. Therefore CJSC “Russian Sea” (ready-to-eat segment) operations are classified as discontinued. Chilled and frozen and aquaculture segments operations are classified as continuing.

In millions of Russian Rubles

1Q 2013

1Q 2012

Change

Revenue from continuing operations

3 376,9

3 141,2

7,5%

Chilled and frozen segment

3 376,9

3 093,0

9,2%

Aquaculture

0

48,2

-

Revenue from discontinued operations (ready-to-eat segment)

578,1*

867,3

-

Total:

3 955,0

4 008,4

(1,3%)

*For January and February 2013

The Group revenue from continuing operations increased in 1Q 2013 as compared to 1Q 2012 by 7,5% and amounted to RUR 3 376,9 million.

Chilled and Frozen segment

Segment’s sales to external customers increased by 9,2% as compared to 1Q 2012 to RUR 3 376,9 million that includes sales in amount of RUR 157,7 million in March 2013 to the company “Russian Sea” that became external customer for “Russian Fish Company” after its sale in February 28, 2013.

Delicacy red fish market situation became one of the main segment’s revenue growth drivers in 1Q 2013. The price increase for imported Norwegian salmon and trout resulted in the Company’s sales price growth that contributed to its operational results improvement. Besides sales of Russian pelagic fish increased in 1Q 2013.

Aquaculture segment

In 1Q 2013 the Company wasn’t selling fish in accordance with a normal for aquaculture segment farming and sales cycle. Fish mainly grows during summer season. Harvest starts at the end of summer and lasts until the planned volumes are sold. In 2012 the fish farmed at the Group’s trout farm in Karelia was harvested in 3Q 2012 and was completely sold by the end of 2012. In 2013 fish harvest and sales start are planned for the third quarter.

Ready-to-eat segment

The segment’s sales to external customers for the first two months of 2013 preceding the sale of this business division amounted to RUR 578,1 mln.

Commenting on the Group results and priorities Dmitry Dangauer, the Company CEO, said:

“During the first quarter of 2013 significant changes took place in Russian Sea Group. The sale of unprofitable ready-to-eat segment to a strategic investor was finalized. Accordingly the costs were cut and the Group’s debt was decreased. Thus labor costs were decreased by more than 50%. In the middle of April the management team of Russian Sea Group was changed. At the moment the Group reorganization is completed. It is a financially stable Company that is necessary for further progressive development of distribution segment and for implementation of an ambitious aquaculture project.

In distribution segment we work on delicacy red fish, Russian pelagic fish and Asian fish and seafood sales increase. In 1Q 2013 we entered a new red fish price growth cycle. According to Fish Pool ASA in 1Q 2013 an average price for Norwegian salmon grew by 39% as compared to 1Q 2012. We expect that in the nearest future prices will stay at the same high level. Such red fish market development trend justify that aquaculture segment’s strategy was chosen correctly and it positively influences chilled and frozen segment’s revenue.

Besides we plan to strengthen “Russian Fish Company” position in retail chains through delicacy red fish sales increase, launch of packaged fish products and frozen assortment sales in retail trade channels, active client’s base extension, sea bass and sea bream sales increase and customers service level improvement.

Aquaculture segment is strategically important and the most promising growth area for Russian Sea Group. In future this business division will play the core role for the Group development. At the moment we prepare for the second Atlantic salmon farm launch in June 2013 on Shalim site in Ura Bay, Barents sea, where we plan to put into water around 1,6 million smolts of Atlantic salmon. The commercial salmon farming was started in 2012 when the first salmon farm was launched at Heretic site in Ura Bay, Barents sea. The first salmon harvest is planned for 2014 and sales are planned in amount of more than 3 000 tons.

We will also launch two more sites and increase trout farming volumes on Russian Sea Group trout farm “Segozerskoye”.