Russian Alcohol Reports 40% Higher Vodka Sales

Russian Alcohol, the maker of Green Mark vodka, said Monday that sales rose 40 percent in 2007 after it introduced a new brand and improved distribution and marketing.

The distiller sold 11 million decaliters of spirits, deputy general director Vladimir Ivanov told reporters Monday. Sales volume this year will rise by at least 20 percent, commercial director Vadim Kasyanov said.

"Last year was a year of investment in developing sales and distribution systems," Ivanov said. "This will allow us to show serious growth in financial results this year."

The country's vodka market, the second-largest after the United States, will expand 5.8 percent annually through 2011 as rising household incomes fuel demand for more expensive brands, according to Renaissance Capital.

Russian Alcohol expects earnings before interest, taxes, depreciation and amortization this year to surge about 70 percent from $50 million expected for 2007, Ivanov said.

The producer introduced a low-premium brand, Zhuravli, or Cranes, across Russia last year and boosted its sales more than 10 times to 1 million decaliters, spokesman Alexander Korovka said. Sales of Green Mark, classified as premium vodka, reached 7.1 million decaliters.

The company is considering an initial share sale, selling a stake to an investor or a bond offering to raise funds for repaying debt or possible acquisitions, Ivanov said. Russian Alcohol has been approached by international producers interested in buying a stake and may agree if they "surprise us with a price," he added. Debt is three times EBITDA, Ivanov said.