First half of growth for WBD

- Last updated on GMT

Related tags: Cent, Marketing

Russia's leading dairy producer Wimm-Bill-Dann continued with its
solid double-digit sales growth in the first half of 2003, although
the cost of expansion weighed heavily on profits.

Wimm-Bill-Dann (WBD) has spent the last six months strengthening its position in the Russian soft drinks market, but this shift of focus has done nothing to hamper growth at the company's dairy business either.

Total group sales for the first six months of the year reached $472.6 million (€435.5m), up 17.3 per cent on the same period a year earlier. Total volumes for the half year rose by 12.4 per cent to 773,600 tons.

Dairy remained by far the most important sector for the company, accounting for sales of $321.7 million, up 17.4 per cent. An increase in the number of added value dairy products produced by WBD enabled the company to increase the average selling price by 8.5 per cent to 64 cents per kilo, in turn pushing up margins by 0.2 per cent.

Juice sales were $150.6 million, up 17 per cent, although the average selling price fell slightly to 56 cents per litre due primarily to a change in the product mix towards lower priced brands. This resulted in a slight decrease in the juice gross margins from 34.8 per cent in the first half of 2002 to 34.6 per cent in the first half of 2003.

The group has also begun production of mineral water under the Sanctuary Valdai brand, and sales from this new business unit reached $0.3 million in the first half. However, operating profit for the six months was down by 18 per cent to $31.5 million, mainly as a result of increased personnel, marketing and transportation costs related to the company's rapid expansion. Net profits were also down, dropping 21 per cent to $17.7 million.

Sergei Plastinin, CEO of Wimm-Bill-Dann, said he was pleased with the pace of sales growth in the first half of the year, although the increasing costs and increasingly challenging business environment were a slight cause for concern.

Wimm-Bill-Dann​ is Russia's leading manufacturer of dairy and juice products, operating 23 manufacturing facilities in 19 locations in Russia and the Commonwealth of Independent States (CIS), as well as affiliates in 26 cities in Russia and the CIS. The company also distributes its products in Canada, Germany, Israel, the Netherlands, the UK and the US through both its own distribution network and independent distributors.

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