PRF: Consolidated Unaudited Interim Report of AS P
Post# of 301275
Overview of the economic activities
Management commentary
PRFoods Q1 performance reflects improved business environment and continued efficiencies achieved through acquisitions in 2017. Q1 and 15 months results show positive trend which management believes to continue well into end of current financial year. Outlook for H1 2018 remains also positive.
PRFoods Q1 revenues were 22.7 million euros, increase of 115.3% year-on-year. EBITDA from operations 0.7 million euros and EBITDA 0.6 million euros, improvement respectively of 341.5% and 203.0% on yearly basis.
2017/2018 financial year was extended until 30.06.2018, to reflect financial year of acquired businesses, PRFoods 15 months figures were as follows: revenues 132.5 million euros, EBITDA from operations 7.6 million euros, EBITDA 5.6 million euros and net profit 1.7 million euros.
These numbers are in line with management expectations and prove that the strategy undertaken and executed by PRFoods is right.
First time since 2016 our Q1 EBITDA from operations is also positive, improving by 1.0 million euros compared to Q1 2017.
All our core markets performed well and we hope to increase in near future our exports to existing export markets. Similarly, all product and client groups all posted positive growth.
Fish farming Q1 biomass revaluation effect was similar to Q1 2017, despite the fact that rainbow trout prices had fallen by 17.9% on year-on-year. Salmon prices actually increased by 16.6% compared to last year. Salmon had an uptick end of Q1 due to colder winters and lower stock from other regions. Overall due to significant growth in fish consumption globally, we do not expect salmon or rainbow trout prices to fall. Compared to end of 2016 and Q1 2017 abnormal price fluctuations, we believe we are entering less volatile period at least in mid-term. PRFoods is looking to increase it is current fish farming capacity and is actively looking for new sites around Baltic Sea and Scotland.
At the end of Q1 biomass value was 4.6 million euros compared to 6.5 million euros year ago, while in tons decrease has been 7.7%, revaluation effect was -24.5%.
Cost efficiency of the business as percentage of sales has decreased across the board, with slight increase in staff costs. Employment costs increase was planned and in future we look more at automation and efficiencies as we are quite competitive in labour market and can attract best employees.
The average number of employees in Q1 2018 was 362.
Capital structure of PRFoods is optimal at the moment, net debt is 16.7 million euros and equity is 24.5 million euros, equity level is 37.8%.
Debt to EBITDA has decreased to 2.7, in long term PRFoods would like to keep debt to EBITDA at 3-3.5 level.
PRFoods share continue to be one of the best performing shares on year on year comparison, outperforming both OMX Tallinn and Baltic Benchmark indexes significantly (respectively 13.1%, 19.7%) having annualized return of 93.4%.
Management of PRFoods maintains positive outlook for the remaining 2017/2018 financial year. We are restructuring our sales in Finland after departure of one of Trio’s main customers, but we are positive that we replace these sales directly to the same end consumers at higher margins.
Main risks related to volatility of fish prices, Brexit, weak sterling remain, but management is taking active measures to counteract these risks.
We thank our employees for doing an excellent job, our customers for buying our products and our shareholders for their continued support.
Quarterly presentation will be published on our website within 2 weeks.
The 1 st quarter of 2018 compared to the 1 st quarter of 2017
- Unaudited consolidated revenue 22.74 million euros, increase +12.18 million euros, i.e. +115.3%.
- Gross margin 10.7%, increase +5.8 percentage points, i.e. +115.5%.
- Negative impact from revaluation of biological assets -0.12 million euros (Q1 2017: negative effect -0.27 million euros).
- EBITDA from operations +0.70 million euros, increase +0.99 million euros.
- EBITDA +0.58 million euros, increase +1.14 million euros.
- The operating profit +0.12 million euros, increase +1.00 million euros.
- Net loss -0.30 million euros, decrease -0.54 million.
The 15 months of 2017/2018 compared to the 12 months of 2016
- Unaudited consolidated revenue 96.35 million euros, increase +48.92 million euros, i.e. +103.1%.
- Gross margin 13.5%, increase +5.0 percentage points.
- Negative impact from revaluation of biological assets -1.62 million euros (12 months 2016: positive impact of +2.26 million euros).
- Effect of one-offs to the result -0.31 million euros (12 month 2016: negative influence -0.40 million euros).
- EBITDA from operations +6.02 million euros, increase +5.26 million euros.
- EBITDA +4.08 million euros, increase +1.47 million euros.
- The operating profit +2.13 million euros, increase +0.75 million euros.
- Net profit +1.12 million euros, increase +0.40 million euros.
KEY RATIOS
| Income Statement, EUR mln | Q1 2018 | Q1 2017 | 15m 2017 | 12m 2017 | 12m 2016 |
| Sales | 22.7 | 10.6 | 96.4 | 73.6 | 47.4 |
| Gross profit | 2.4 | 0.5 | 13.0 | 10.6 | 4.0 |
| EBITDA from operations | 0.7 | -0.3 | 6.0 | 5.4 | 0.8 |
| EBITDA | 0.6 | -0.6 | 4.1 | 3.6 | 2.6 |
| EBIT | 0.1 | -0.9 | 2.1 | 2.0 | 1.4 |
| EBT | -0.3 | -0.9 | 0.9 | 1.2 | 1.1 |
| Net profit (-loss) | -0.3 | -0.8 | 1.1 | 1.4 | 0.7 |
| Gross margin | 10.7% | 5.0% | 13.5% | 14.4% | 8.5% |
| Operational EBITDA margin | 3.1% | -2.7% | 6.2% | 7.3% | 1.6% |
| EBITDA margin | 2.5% | -5.3% | 4.2% | 4.8% | 5.5% |
| EBIT margin | 0.5% | -8.3% | 2.2% | 2.7% | 2.9% |
| EBT margin | -1.2% | -8.5% | 1.0% | 1.6% | 2.4% |
| Net margin | -1.3% | -7.9% | 1.2% | 1.9% | 1.5% |
| Operating expense ratio | 10.3% | 11.2% | 10.0% | 9.9% | 10.1% |
| Balance Sheet, EUR mln | 31.03.2018 | 31.03.2017 | 31.12.2017 | 31.12.2016 |
| Net debt | 16.7 | 1.6 | 16.6 | 0.3 |
| Equity | 24.5 | 22.8 | 24.8 | 23.8 |
| Working capital | 4.6 | 11.5 | 5.3 | 12.4 |
| Assets | 64.8 | 33.3 | 67.0 | 35.1 |
| Liquidity ratio | 1.2 | 2.4 | 1.2 | 2.4 |
| Equity ratio | 37.8% | 68.5% | 37.1% | 67.9% |
| Gearing ratio | 40.6% | 6.4% | 40.0% | 1.2% |
| Net debt-to-EBITDA | 2.7 | 6.4 | 3.1 | 0.4 |
| ROE | 8.3% | 1.5% | 5.8% | 3.0% |
| ROA | 4.0% | 1.1% | 2.8% | 2.2% |
Consolidated statement of financial position
| EUR '000 | 31.03.2018 | 31.03.2017 | 31.12.2017 | 31.12.2016 |
| ASSETS | ||||
| Cash and cash equivalents | 7,128 | 3,570 | 6,491 | 4,374 |
| Receivables and prepayments | 5,773 | 2,557 | 8,982 | 4,056 |
| Inventories | 13,495 | 7,225 | 11,747 | 5,393 |
| Biological assets | 4,560 | 6,543 | 5,566 | 7,584 |
| Total current assets | 30,956 | 19,895 | 32,786 | 21,407 |
| Deferred income tax | 214 | 228 | 222 | 230 |
| Long-term financial investments | 102 | 102 | 102 | 103 |
| Tangible fixed assets | 11,129 | 7,112 | 11,425 | 7,285 |
| Intangible assets | 22,425 | 6,007 | 22,450 | 6,031 |
| Total non-current assets | 33,870 | 13,449 | 34,199 | 13,649 |
| TOTAL ASSETS | 64,826 | 33,344 | 66,985 | 35,056 |
| EQUITY AND LIABILITIES | ||||
| Loans and borrowings | 11,615 | 4,271 | 10,105 | 3,716 |
| Payables | 14,521 | 3,950 | 17,115 | 5,131 |
| Government grants | 265 | 176 | 306 | 162 |
| Total current liabilities | 26,401 | 8,397 | 27,526 | 9,009 |
| Loans and borrowings | 12,229 | 862 | 12,957 | 940 |
| Deferred tax liabilities | 503 | 685 | 523 | 747 |
| Government grants | 1,216 | 564 | 1,144 | 551 |
| Total non-current liabilities | 13,948 | 2,111 | 14,624 | 2,238 |
| TOTAL LIABILITIES | 40,349 | 10,508 | 42,150 | 11,247 |
| Share capital | 7,737 | 7,737 | 7,737 | 7,737 |
| Share premium | 14,007 | 14,007 | 14,007 | 14,007 |
| Treasury shares | -390 | -390 | -390 | -256 |
| Statutory capital reserve | 48 | 12 | 48 | 12 |
| Currency translation reserve | 112 | 428 | 173 | 428 |
| Retained profit (-loss) | 2,875 | 1,042 | 3,185 | 1,881 |
| Equity attributable to parent | 24,389 | 22,836 | 24,760 | 23,809 |
| Non-controlling interest | 88 | 0 | 75 | 0 |
| TOTAL EQUITY | 24,477 | 22,836 | 24,835 | 23,809 |
| TOTAL EQUITY AND LIABILITIES | 64,826 | 33,344 | 66,985 | 35,056 |
Consolidated statement of profit or loss and other comprehensive income
| EUR '000 | Q1 2018 | Q1 2017 | 15m 2017 | 12m 2017 | 12m 2016 |
| Sales | 22,740 | 10,562 | 96,350 | 73,610 | 47,429 |
| Cost of goods sold | -20,299 | -10,036 | -83,333 | -63,034 | -43,410 |
| Gross profit | 2,441 | 526 | 13,017 | 10,576 | 4,019 |
| Operating expenses | -2,351 | -1,179 | -9,657 | -7,306 | -4,785 |
| Selling and distribution expenses | -1,659 | -837 | -6,809 | -5,150 | -3,346 |
| Administrative expenses | -692 | -342 | -2,848 | -2,156 | -1,439 |
| Other income/expenses | 152 | 50 | 392 | 240 | -118 |
| Fair value adjustment on biological assets | -118 | -270 | -1,623 | -1,505 | 2,263 |
| Operating profit (-loss) | 124 | -873 | 2,129 | 2,005 | 1,379 |
| Financial income | 2 | 6 | 6 | 4 | 2 |
| Financial expenses | -391 | -34 | -1,193 | -802 | -240 |
| Profit (-loss) before tax | -265 | -901 | 942 | 1,207 | 1,141 |
| Income tax | -32 | 62 | 176 | 208 | -426 |
| Net profit (-loss) for the period | -297 | -839 | 1,118 | 1,415 | 715 |
| Net profit (-loss) attributable to: | |||||
| Owners of the company | -310 | -839 | 1,030 | 1,340 | 715 |
| Non-controlling interests | 13 | 0 | 88 | 75 | 0 |
| Total net profit (-loss) | -297 | -839 | 1,118 | 1,415 | 715 |
| Other comprehensive income (-loss) that may subsequently be classified to profit or loss: | |||||
| Foreign currency translation differences | -61 | 0 | -316 | -255 | -43 |
| Total comprehensive income (-expense) | -358 | -839 | 802 | 1,160 | 672 |
| Total comprehensive income (-expense) attributable to: | |||||
| Owners of the Company | -371 | -839 | 714 | 1,085 | 672 |
| Non-controlling interests | 13 | 0 | 88 | 75 | 0 |
| Total comprehensive income (-expense) for the period | -358 | -839 | 802 | 1,160 | 672 |
| Profit (-loss) per share (EUR) | -0.01 | -0.02 | 0.02 | 0.03 | 0.02 |
| Diluted profit (-loss) per share (EUR) | -0.01 | -0.02 | 0.02 | 0.03 | 0.02 |
Indrek Kasela AS PRFoods Member of the Management Board Phone: +372 452 1470 investor@prfoods.ee www.prfoods.ee
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