OREANDA-NEWS. August 9, 2011. Russian Sea Group released a strong 1H11 trading update today (9 Aug). Total revenue was up a substantial 18% YoY to nearly RUB8.6bn on the back of 15% YoY average price growth, while volumes remained essentially flat YoY (+2%).

We see the greatest improvement in the ready-to-eat segment which added 36% YoY to RUB2.3bn. Prices and volumes increased significantly in the segment, rising 18% and 15% YoY, respectively. The distribution segment (chilled and frozen fish) showed quite moderate dynamics, up 6% YoY in revenue terms on the back of 5% YoY growth in prices and flat volumes.

Bottom line

Significant volume growth was attributable to the marketing campaigns conducted in 1H11, which should mean elevated SG&A costs, in our view. As a result, we expect any improvements in EBITDA to be smaller than those already seen on the top line. Overall the results look positive although we doubt they will affect the stock significantly due to the unfavourable market situation.