PRF: Consolidated Unaudited Interim Report of AS P
Post# of 301275
Tallinn, Estonia, 2017-02-26 22:00 CET (GLOBE NEWSWIRE) --
Overview of the economic activities
MANAGEMENT COMMENTARY
2016 was successful for PRFoods. We exceeded our revenue prognosis by 2.4 million euros and profit before taxes and depreciation (EBITDA) increased by 28.7%, i.e. 0.6 million euros. The company achieved revenue of 47.4 million euros (Q4 sales 16.9 million euros), but faced very rapid increase in raw material prices well into Q4.
PRFoods increased its 2016 EBITDA to 2.6 million euros, up by 0.6 million euros y-o-y, thanks to fish farming operations, but operational EBITDA lagged due to increase in cost of goods sold.
PRFoods management did an excellent job in countering the increase in fish prices, trimmed company’s cost base and actively worked on transferring price increases to customers. This resulted in posting Q4 0,7 million euros operational EBITDA, without one-off costs 1.1 million euros. In Q4 we used our own fish in processing, resulting in decrease (loss) in biomass by 1.1 million euros.
In year 2016, the company incurred larger one-off costs related to certain corporate activities, investments and brand relaunch to take place in 2017. We do not foresee such extraordinary one-off costs in 2017.
Fish farming
The year 2016 was excellent for our fish farming operations. The season started much earlier in Finland and Sweden, as well as good climatic conditions that lasted throughout the active season for farming. We improved the quality of feeds and feeding technologies, which resulted higher growth in biomass. In the end of 2016 our fish biomass is 16.7 % higher on y-o-y basis, providing us majority of raw material needed for spring-summer season when access to third party raw material is usually restricted. Biomass at the end of 2016 was 1,418 tons and in fair value 7.6 million euros (2015: respectively 1,215 tons and 4.4 million euros in fair value). We estimate fish prices to stabilize at somewhat lower prices in 2017. Access to raw material, in particular farmed rainbow trout, remains critical and our own farms give company a unique advantage in the current markets.
Fish processing
Fish processing struggled with increased raw material prices, affecting both volumes and prices. Same problem plagued all our competitors. PRFoods pulled out of several low-margin private label products, resulting in loss of sales. Retailers have also cancelled campaigns for fish due to higher prices. Pricing with retailers is usually agreed in advance and only in Q4 we witnessed an increase in retailer prices. In Q4 operational EBITDA from fish processing was 0.7 million euros (1.1 without one-offs) and 2016 operational EBITDA was 0.4 million euros. We foresee significant increase in operational EBITDA in 2017. More detailed forecasts will be released together with Q1 results.
Since majority of investments in fish processing have been already undertaken, we foresee only investments in upgrade of existing machinery to be made in 2017.
Markets
Our main market is Finland, but we see rapid development of other markets including Baltics, Asia, Europe. We aim to achieve in long-term 40% of export from our total sales.
Personnel
PRFoods has strengthened its IT and finance departments, and we have streamlined our operational staff thanks to investments. We employ 200 people, that is 17 less on y-o-y, and we aim to maintain competitive salary level across the firm.
Financials
PRFoods has very solid balance sheet, very low level of debt and our cash balance increased to 4.4 million euros. This allows company to look actively at various expansion opportunities, both organic and through acquisitions.
PRFoods remains to be one of the undisputed leaders in our core markets and we strive to improve our position in terms of sales, quality and profitability.
I would like to thank all the staff of PRFoods for excellent job in 2016 and we are looking optimistically towards 2017.
We are grateful for the loyalty of our customers and promise to be a first-choice producer of high quality fish products.
UNAUDITED FINANCIAL RESULTS OF AS PRFOODS, THE 4TH QUARTER OF 2016 COMPARED TO THE 4TH QUARTER OF 2015
- Unaudited consolidated revenue 16.9 million euros, decrease -0.3 million euros, i.e. -1.6%.
- Gross margin 11.4%, decrease -3.6 percentage points.
- Negative impact from revaluation of biological assets -1.1 million euros (4th quarter 2015: negative impact of -0.4 million euros).
- EBITDA from operations 0,7 million euros, decrease -0.7 million euros (without one-off effects in year 2016 EBITDA 1.1 million euros, decrease -0.3 million euros).
- EBITDA -0.4 million euros, decrease -1.5 million euros, i.e. -143.6% (without one-off effects -0.05 million euros, decrease -1.1 million euros).
- The operating loss -0.8 million euros, increase -1.5 million euros, i.e. 205.4% (without one-off effects -0.4 million euros, decrease -1.1 million euros).
- Net loss -0.5 million euros, increase -1.3 million euros, i.e. -174.4% (without one-off effects -0.1 million euros, increase -0.9 million euros).
UNAUDITED FINANCIAL RESULTS OF AS PRFOODS, THE 12 MONTHS OF 2016 COMPARED TO THE 12 MONTHS OF 2015
- Unaudited consolidated revenue 47.4 million euros, decrease -2.8 million euros, i.e. -5.7%.
- Gross margin 8.5%, decrease -5.0 percentage points.
- Positive impact from revaluation of biological assets +2.3 million euros (12 months 2015: negative impact of -0.9 million euros).
- EBITDA from operations 0.4 million euros, decrease -2.6 million euros (without one-off effects in year 2016 EBITDA 0.8 million euros, decrease -2.2 million euros).
- EBITDA 2.6 million euros, improvement +0.6 million euros (without one-off effects 3.0 million euros, improvement +1.0 million euros).
- The operating profit 1.4 million euros, improvement +0.5 million euros, i.e. +58.6% (without one-off effects 1.8 million euros, improvement +0.9 million euros).
- Net profit 0.7 million euros, decrease -0.5 million euros, i.e. -44.1% (without one-off effects 1.1 million euros, decrease -0.1 million euros, i.e. -10.0%).
KEY RATIOS
| Income Statement, EUR mln | Q1 2016 | Q2 2016 | Q3 2016 | Q4 2016 | 12m 2016 | Q1 2015 | Q2 2015 | Q3 2015 | Q4 2015 | 12m 2015 |
| Sales | 10.2 | 9.8 | 10.5 | 16.9 | 47.4 | 10.3 | 11.4 | 11.4 | 17.2 | 50.3 |
| Gross profit | 1.0 | 0.6 | 0.5 | 1.9 | 4.0 | 1.3 | 1.3 | 1.6 | 2.6 | 6.8 |
| EBITDA from operations | 0.2 | -0.3 | -0.3 | 1.1 | 0.8 | 0.4 | 0.4 | 0.7 | 1.4 | 2.9 |
| EBITDA | -0.2 | 0.7 | 2.6 | -0.4 | 2.6 | -0.6 | 0.6 | 1.1 | 1.0 | 2.0 |
| EBIT | -0.5 | 0.3 | 2.3 | -0.8 | 1.4 | -0.9 | 0.3 | 0.8 | 0.7 | 0.9 |
| EBT | -0.6 | 0.2 | 2.2 | -0.8 | 1.1 | -0.8 | 0.3 | 0.8 | 0.8 | 1.1 |
| Net profit (-loss) | -0.5 | 0.04 | 1.6 | -0.5 | 0.7 | -0.5 | 0.3 | 0.7 | 0.7 | 1.2 |
| Gross margin | 9.5% | 6.3% | 4.7% | 11.4% | 8.5% | 12.2% | 11.3% | 14.5% | 15.0% | 13.5% |
| Operational EBITDA margin | 2.1% | -2.6% | -2.6% | 6.2% | 1.6% | 4.1% | 3.3% | 6.5% | 8.1% | 5.8% |
| EBITDA margin | -2.2% | 6.8% | 24.9% | -2.6% | 5.5% | -5.9% | 4.8% | 9.4% | 6.0% | 4.0% |
| EBIT margin | -5.2% | 3.6% | 22.0% | -4.5% | 2.9% | -8.6% | 2.4% | 6.8% | 4.2% | 1.7% |
| EBT margin | -5.5% | 2.3% | 21.3% | -4.5% | 2.4% | -7.4% | 2.9% | 6.6% | 4.4% | 2.1% |
| Net margin | -4.5% | 0.4% | 15.5% | -3.2% | 1.4% | -5.2% | 2.5% | 6.1% | 4.3% | 2.3% |
| Operating expense ratio | 10.5% | 12.7% | 11.2% | 7.7% | 10.1% | 11.3% | 11.3% | 11.9% | 9.3% | 10.8% |
| Balance Sheet, EUR mln | 31/03/2016 | 30/06/2016 | 30/09/2016 | 31/12/2016 | 31/03/2015 | 30/06/2015 | 30/09/2015 | 31/12/2015 |
| Net debt | -3.1 | -1.4 | 1.3 | 0.3 | -3.3 | -6.5 | -5.2 | -0.6 |
| Equity | 22.7 | 22.7 | 24.3 | 23.8 | 33.1 | 33.3 | 34.0 | 23.2 |
| Working capital | 11.0 | 11.2 | 13.3 | 12.4 | 21.6 | 21.7 | 21.8 | 11.4 |
| Assets | 28.6 | 29.3 | 34.4 | 35.0 | 39.5 | 39.4 | 40.1 | 29.5 |
| Liquidity ratio | 3.7 | 3.4 | 2.7 | 2.4 | 5.5 | 5.9 | 5.9 | 3.7 |
| Equity ratio | 79.4% | 77.6% | 70.7% | 67.9% | 83.9% | 84.6% | 84.7% | 78.8% |
| Gearing ratio | -15.7% | -6.7% | 5.2% | 1.1% | -11.0% | -24.1% | -18.2% | -2.5% |
| Net debt-to-EBITDA | -1.1 | -0.7 | 1.2 | 0.4 | -11.2 | -8.2 | -4.4 | -0.2 |
| ROE | 4.5% | 3.6% | 6.7% | 2.8% | -3.2% | -3.9% | -2.3% | 4.1% |
| ROA | 3.7% | 2.9% | 5.2% | 2.0% | -2.1% | -2.6% | -1.6% | 3.4% |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
| EUR '000 | 31/12/2016 | 31/12/2015 |
| ASSETS | ||
| Cash and cash equivalents | 4,374 | 1,921 |
| Receivables and prepayments | 4,065 | 3,653 |
| Inventories | 5,393 | 5,616 |
| Biological assets | 7,584 | 4,421 |
| Total current assets | 21,416 | 15,611 |
| Deferred income tax | 134 | 138 |
| Long-term financial investments | 103 | 161 |
| Tangible fixed assets | 7,285 | 7,427 |
| Intangible assets | 6,031 | 6,128 |
| Total non-current assets | 13,553 | 13,854 |
| TOTAL ASSETS | 34,969 | 29,465 |
| EQUITY AND LIABILITIES | ||
| Loans and borrowings | 3,700 | 286 |
| Payables | 5,127 | 3,760 |
| Government grants | 162 | 177 |
| Total current liabilities | 8,989 | 4,223 |
| Loans and borrowings | 940 | 1,063 |
| Deferred tax liabilities | 736 | 252 |
| Government grants | 551 | 706 |
| Total non-current liabilities | 2,227 | 2,021 |
| TOTAL LIABILITIES | 11,216 | 6,244 |
| Share capital | 7,737 | 7,737 |
| Share premium | 14,007 | 16,026 |
| Treasury shares | -256 | -172 |
| Statutory capital reserve | 12 | 6 |
| Currency translation reserve | 428 | 471 |
| Retained profit (-loss) | 1,825 | -847 |
| Equity attributable to parent | 23,753 | 23,221 |
| TOTAL EQUITY | 23,753 | 23,221 |
| TOTAL EQUITY AND LIABILITIES | 34,969 | 29,465 |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
| EUR '000 | Q4 2016 | Q4 2015 | 12m 2016 | 12m 2015 |
| Sales | 16,903 | 17,178 | 47,429 | 50,273 |
| Cost of goods sold | -14,971 | -14,599 | -43,409 | -43,509 |
| Gross profit | 1,932 | 2,579 | 4,020 | 6,764 |
| Operating expenses | -1,294 | -1,599 | -4,782 | -5,411 |
| Selling and distribution expenses | -964 | -1,249 | -3,346 | -4,033 |
| Administrative expenses | -330 | -350 | -1,436 | -1,378 |
| Other income/expenses | -293 | 96 | -120 | 406 |
| Fair value adjustment on biological assets | -1,101 | -359 | 2,263 | -888 |
| Operating profit (-loss) | -756 | 717 | 1,381 | 871 |
| Financial income | 1 | 65 | 2 | 303 |
| Financial expenses | -7 | -25 | -238 | -105 |
| Profit (-loss) before tax | -762 | 757 | 1,145 | 1,069 |
| Income tax | 214 | -20 | -486 | 110 |
| Net profit (-loss) for the period | -548 | 737 | 659 | 1,179 |
| Other comprehensive income (-loss) that may subsequently be classified to profit or loss: | ||||
| Foreign currency translation differences | 8 | 32 | -43 | 30 |
| Total comprehensive income (-expense) | -540 | 769 | 616 | 1,209 |
Indrek Kasela AS PRFoods Member of the Management Board Phone: +372 6033 800 investor@prfoods.ee www.prfoods.ee
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