Lebedyansky on Friday released audited financials for FY 2007 and operating and financial results for 1Q 2008. The reported FY 2007 financials add little new information to the data published previously and already known on the market. The 1Q 2007 financial results, even though fairly weak, are unlikely to seriously impact share quotations due to replacement of its shareholders and the fact that the network is about to cease to exist as a publicly-traded company. The company's 1Q financials rose by 16.8% y-o-y to USD 245.3 mn. The company's juice segment saw its sales down, while the baby food and mineral water division was the main contributor to overall revenue growth, attributable to a steady rise in sales and average selling prices.
Table. Lebedyansky: Key financial indices for 1Q 2008, USD mn
| Indicator | 1Q2007 | 1Q2008 | 1Q2008/1Q2007 |
|---|
| Revenue | 210.0 | 245.3 | 16.8% |
| including: | | | |
| Juices | 182.3 | 202.8 | 11.2% |
| Baby food | 25.1 | 37.7 | 50.2% |
| Mineral water | 2.6 | 4.8 | 84.6% |
| Gross profit | 88.9 | 91.7 | 3.1% |
| Gross margin | 42.3% | 37.4% | |
| Commercial expenses | 40.80 | 65.70 | 61.0% |
| General and administrative expenses | 13.30 | 20.40 | 53.4% |
| EBITDA | 41.5 | 15.9 | -61.7% |
| EBITDA margin | 19.8% | 6.5% | |
| Net profit | 24.2 | -5.4 | - |
| Net margin | 11.5% | - | |
Source: company data, Finam estimates
Outrunning growth in production costs (at over 23% y-o-y), driven by growing raw material and packaging costs, and a surge in operating expenses, as a percentage of revenue, to 35.1%, up from 25.8% for 1Q 2007, took a toll on the company's profit margins.
We are downbeat about the company's 1Q 2008 financial results and believe they could hurt the company's stock valuations in the short term. However, given the company's new management and its restructuring efforts, the news is unlikely to be of primary importance for minority shareholders.
We do not presently have an official recommendation on Lebedyansky shares.
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