Wimm-Bill-Dann on Friday posted a second quarter net profit of $52.3 million, a 42.6 percent increase year on year, beating analysts’ expectations.
“The second quarter of 2009 … proved that profitable growth can be achieved despite somewhat weakened consumer demand,” chief executive Tony Maher said in a statement.
Sales for the period stood at $1.1 billion, down 28 percent year on year because of the ruble devaluation, the company said, adding that the loss was partially compensated for by positive currency trends.
The firm’s earnings before interest, taxes, depreciation and amortization stood at $85.2 million, down 8.4 percent year on year. Its EBITDA margin grew to 15.4 percent, for a year-on-year growth of 320 basis points, the statement said.
“Our operating cash flow continued to show significant improvement, while our net debt decreased 49 percent year on year and stood at $280.8 million, the lowest level for many years,” Maher said.
Wimm-Bill-Dann, the country’s biggest dairy and children’s food producer, said the cost of goods fell in the dairy segment, which helped its profit margins in that segment rise 200 percentage points year on year.
“This year the dairy industry, both in Russia and worldwide, faced raw and powder milk overproduction, which pushed down average procurement prices by 15 percent,” said Andrei Danilenko, chairman of the National Dairy Producers Union.
“Traditionally, summer milk procurement prices go down by 5 percent to an average price of about 11 rubles, while now it doesn’t exceed 9 rubles and even less, which makes raw milk farmers beyond the profitability line,” he said.
At the end of July, the Federal Anti-Monopoly Service accused dairy majors Wimm-Bill-Dann, Danone, Ehrmann and Campina of collusion. The service said the four producers simultaneously dropped the prices they were paying for milk in the Moscow region by 25 percent in late 2008 and refused to sign new contracts.
A Message from The Moscow Times:
Dear readers,
We are facing unprecedented challenges. Russia's Prosecutor General's Office has designated The Moscow Times as an "undesirable" organization, criminalizing our work and putting our staff at risk of prosecution. This follows our earlier unjust labeling as a "foreign agent."
These actions are direct attempts to silence independent journalism in Russia. The authorities claim our work "discredits the decisions of the Russian leadership." We see things differently: we strive to provide accurate, unbiased reporting on Russia.
We, the journalists of The Moscow Times, refuse to be silenced. But to continue our work, we need your help.
Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and every contribution makes a significant impact.
By supporting The Moscow Times, you're defending open, independent journalism in the face of repression. Thank you for standing with us.
Remind me later.