Tallinn, Estonia, 2017-05-30 15:30 CEST (GLOBE NEWSWIRE) --
Overview of the economic activities
MANAGEMENT COMMENTARY
PRFoods had mixed results from Q1. Group revenues grew to 10.6 million euros, by 0.3 million euros i.e. 3.2% and net loss was -0.84 million euros (Q1 2016: -0.46 million euros). Unfortunately, profitability was affected by still abnormally high fish prices. It mostly affected our operational EBITDA which came to -0.3 million euros (decrease by 0.5 million euros). This was somewhat offset better than expected results from fish farming, which improved by 39% in euros on year-on-year. Biomass revaluation traditionally produces negative EBITDA in Q1 as this is the winter period. The value of biomass was reduced by harvested raw fish (monetary change compared to 31.12.2016 was -1.0 million euros).
Although sales results in Finland were not satisfactory, we remain optimistic about the forecast for the year. Overall consensus is that raw material prices will normalize during 2nd half of the year. Our biomass is higher, allowing us to utilize more of our own fish. Most importantly in most products price increases have been pushed through in February and May. We anticipate next price increases to take place in June. After that we have increased our prices in Finland by all product groups ca 20-50%. On positive note, we managed to increase substantially own product sales in Finland, and in various product groups they amount to 55-65%, compared to ca 20% year ago. Profitability remains an issue in Finland and we are taking further steps to pass on price increases to customers and cutting unprofitable products.
Our balance sheet remains strong and PRFoods has high degree of liquidity. Our net debt is at 1.6 million euros. The increase in net debt is due to increase in inventory at the end of the quarter both in terms of value and volume as we purchased more fish for spring production. Also, the sales peak of Easter happened after the end of Q1, which inflates the inventory. Also, the amount of biological assets is higher than usual in this period by 576 tonnes, i.e. 103%.
The prices of raw fish have been very high in Q1 compared to historical prices of raw material, affecting both demand and profitability. Extraordinarily, the price of rainbow trout has been higher than salmon and considering that rainbow trout is our main raw material, the Q1 was more difficult for us. We can anticipate that in 2nd half of the year, the prices of raw material will start to drop, this is good news for us as a producer as well to our customers.
PRFoods has finished preparations for brand renewal and will launch new brand concept this summer.
PRFoods will announce its 2017 forecast together with Q2 results.
The 1st quarter of 2017 compared to the 1st quarter of 2016
- Unaudited consolidated revenue 10.6 million euros, increase +0.3 million euros.
- Gross margin 5.0%, decrease -4.6 percentage points.
- Negative impact from revaluation of biological assets -0.3 million euros, improvement +0.2 million euros.
- Volume of biological assets was 1 135 tonnes and in monetary value 6.5 million euros, increase accordingly 576 tonnes and 4.1 million euros.
- EBITDA from operations -0.3 million euros, decrease -0.5 million euros.
- EBITDA -0.6 million euros, decrease -0.3 million euros.
- The operating loss -0.9 million euros, increase -0.3 million euros.
- Net loss -0.8 million euros, increase -0.4 million euros.
KEY RATIOS
| Profit & Loss, EUR mln | Q1 2017 | Q1 2016 | 12m 2016 |
| Sales | 10.6 | 10.2 | 47.4 |
| Gross profit | 0.5 | 1.0 | 4.0 |
| EBITDA from operations | -0.3 | 0.2 | 0.8 |
| EBITDA | -0.6 | -0.2 | 2.6 |
| EBIT | -0.9 | -0.5 | 1.4 |
| EBT | -0.9 | -0.6 | 1.1 |
| Net profit (-loss) | -0.84 | -0.46 | 0.72 |
| Gross margin | 5.0% | 9.5% | 8.5% |
| Operational EBITDA margin | -2.7% | 2.1% | 1.6% |
| EBITDA margin | -5.3% | -2.2% | 5.5% |
| EBIT margin | -8.3% | -5.2% | 2.9% |
| EBT margin | -8.5% | -5.5% | 2.4% |
| Net margin | -7.9% | -4.5% | 1.5% |
| Operating expense ratio | 11.2% | 10.5% | 10.1% |
KEY RATIOS
| Balance Sheet, EUR mln | 31.03.2017 | 31.03.2016 | 31.12.2016 |
| Net debt | 1.6 | -3.1 | 0.3 |
| Equity | 22.8 | 22.7 | 23.8 |
| Working capital | 11.5 | 11.0 | 12.4 |
| Assets | 33.3 | 28.6 | 35.1 |
| Liquidity ratio | 2.4 | 3.7 | 2.4 |
| Equity ratio | 68.5% | 79.4% | 67.9% |
| Gearing ratio | 6.4% | -15.7% | 1.2% |
| Net debt-to-EBITDA | 6.4 | -1.1 | 0.4 |
| ROE | 1.5% | 4.5% | 3.0% |
| ROA | 1.1% | 3.7% | 2.2% |
Consolidated statement of financial position
| EUR '000 | 31.03.2017 | 31.03.2016 | 31.12.2016 |
| ASSETS | |||
| Cash and cash equivalents | 3,570 | 4,378 | 4,374 |
| Receivables and prepayments | 2,557 | 2,463 | 4,056 |
| Inventories | 7,225 | 5,754 | 5,393 |
| Biological assets | 6,543 | 2,451 | 7,584 |
| Total current assets | 19,895 | 15,046 | 21,407 |
| Deferred income tax | 228 | 138 | 230 |
| Long-term financial investments | 102 | 161 | 103 |
| Tangible fixed assets | 7,112 | 7,178 | 7,285 |
| Intangible assets | 6,007 | 6,109 | 6,031 |
| Total non-current assets | 13,449 | 13,586 | 13,649 |
| TOTAL ASSETS | 33,344 | 28,632 | 35,056 |
| EQUITY AND LIABILITIES | |||
| Loans and borrowings | 4,271 | 287 | 3,716 |
| Payables | 3,950 | 3,617 | 5,131 |
| Government grants | 176 | 164 | 162 |
| Total current liabilities | 8,397 | 4,068 | 9,009 |
| Loans and borrowings | 862 | 1,002 | 940 |
| Deferred tax liabilities | 685 | 152 | 747 |
| Government grants | 564 | 677 | 551 |
| Total non-current liabilities | 2,111 | 1,831 | 2,238 |
| TOTAL LIABILITIES | 10,508 | 5,899 | 11,247 |
| Share capital | 7,737 | 7,737 | 7,737 |
| Share premium | 14,007 | 16,026 | 14,007 |
| Treasury shares | -390 | -190 | -256 |
| Statutory capital reserve | 12 | 6 | 12 |
| Currency translation reserve | 428 | 465 | 428 |
| Retained profit (-loss) | 1,042 | -1,311 | 1,881 |
| Equity attributable to parent | 22,836 | 22,733 | 23,809 |
| TOTAL EQUITY | 22,836 | 22,733 | 23,809 |
| TOTAL EQUITY AND LIABILITIES | 33,344 | 28,632 | 35,056 |
Consolidated statement of profit or loss and other comprehensive income
| EUR '000 | Q1 2017 | Q1 2016 | 12m 2016 |
| Sales | 10,562 | 10,235 | 47,429 |
| Cost of goods sold | -10,036 | -9,258 | -43,410 |
| Gross profit | 526 | 977 | 4,019 |
| Operating expenses | -1,179 | -1,078 | -4,785 |
| Selling and distribution expenses | -837 | -766 | -3,346 |
| Administrative expenses | -342 | -312 | -1,439 |
| Other income/expenses | 50 | 12 | -118 |
| Fair value adjustment on biological assets | -270 | -444 | 2,263 |
| Operating profit (-loss) | -873 | -533 | 1,379 |
| Financial income | 6 | 0 | 2 |
| Financial expenses | -34 | -32 | -240 |
| Profit (-loss) before tax | -901 | -565 | 1,141 |
| Income tax | 62 | 101 | -426 |
| Net profit (-loss) for the period | -839 | -464 | 715 |
| Other comprehensive income (-loss) that may subsequently be classified to profit or loss: | |||
| Foreign currency translation differences | 0 | -6 | -43 |
| Total comprehensive income (-expense) | -839 | -470 | 672 |
Indrek Kasela AS PRFoods Member of the Management Board Phone: +372 452 1470 investor@prfoods.ee www.prfoods.ee
