Full-year profit up 14.6%

Full-year profit up 14.6%

Wimm-Bill-Dann, the Russian drinks and dairy group, has reported an increase in full-year profits on share gains in its beverages division.

For the year ended 31 December, net income increased 14.6% year-on-year to reach US$116.5m. On a constant currency basis (in rubles), net income increased by 46.4% compared to 2008.

Group sales decreased 23% year-on-year to $2.18bn, driven by ruble devaluation, and partially offset by improved sales mix in dairy and stronger volumes in beverages and baby food.

“Wimm-Bill-Dann achieved solid growth in profitability and significantly improved its balance sheet in 2009 despite continuing macroeconomic pressure and a temporary shortage of raw milk late in the year, which impacted dairy sales and margins in the fourth quarter,” said Tony Maher, Wimm-Bill-Dann’s CEO.

“While we were forced to restrict the production of some of our dairy products in the fourth quarter, on the whole, we succeeded in further strengthening our market position.

“We accelerated share gains in beverages, enhancing our market position. Furthermore, and most importantly, we are confident in the fundamentals of all of our markets and remain fully committed to our strategy of profitable growth coupled with sound financial discipline,” he added.

Operating income for the 12-month period dropped 17.7% to $201.7m, while EBITDA dropped 15.1% to $306.6m.

Beverage sales also dropped, to $406.6m, a 14.1% slide on the previous year. This was driven by a negative exchange rate and partially offset by strong volume growth and pricing.

“Despite the new challenges we faced in 2009, we remain optimistic about the coming year. We made significant progress in the last year strengthening our operations, investing in our brands, expanding our market share, and strengthening our balance sheet,” Maher said.

In the fourth quarter, the company swung to net profits of $7.1m from losses of $7.9m in the prior year. Sales, however, dropped 7% to $585.5m.