PRF: Consolidated Unaudited Interim Report of AS P
Post# of 301275
Overview of the economic activities
Management commentary
PRFoods’ first amended financial year has ended. We kindly remind you that as we changed our accounting calendar, the last financial year extended to 18 months. Financial year that began on 01.07.2018 lasts 12 months as usual and ends 30.06.2019.
For PRFoods last financial year was ground-breaking. We acquired two companies, in Finland and in Great Britain, and as a result our revenues grew more than two times. The focus of our business stays the same and we concentrate on farming and processing salmonoids. Our product portfolio was extended primarily in premium processed fish and fresh fish trading. During the current financial year, we focus on achieving the synergies through reorganization of our operations and further efficiencies and significantly more aggressive marketing efforts.
PRFoods 2017/18 pro forma 18- month revenues were 154.6 million euros, EBITDA from operations was 7.3 million euros (EBITDA including biomass revaluation and one-offs was 6.0 million euros. One-offs were related to transactions costs). Net profit was 0.9 million euros.
18 months consolidated results are as follows:
- Unaudited consolidated revenue 118.50 million euros, increase +71.07 million euros, i.e. +149.8%.
- Gross margin 12.4%, decrease -1.9 percentage points.
- Negative impact from revaluation of biological assets -0.52 million euros (12 months 2016: positive impact of
+2.26 million euros).
- Effect of one-offs to the result -0.82 million euros (12 month 2016: negative influence -0.40 million euros).
- EBITDA from operations +5.84 million euros, increase +5.09 million euros.
- EBITDA +4.49 million euros, increase +1.88 million euros (without one-off effects EBITDA +5.32 million euros, increase +2.30 million euros).
- The operating profit +1.84 million euros, increase +0.46 million euros (without one-off effects operating profit +2.67 million euros, increase +0.89 million euros).
- Net profit +0.32 million euros, decrease -0.39 million euros (without one-off effects net profit +1.15 million euros, increase +0.03 million euros).
Although we are content with the results and they meet management’s expectations, we have to take into account the significant fluctuations in raw material prices. In the opinion of the management, the price of salmonoids remains at the same level in near- and mid-term perspective, as demand outstrips supply. As a result of this, we have undertaken a plan to increase substantially our Fish farming capacity and the target is to increase the capacity by 2-3 times from today’s capacity.
PRFoods balance sheet remains strong. Net Debt to EBITDA is 3 times, net debt stands at 18 million euros, equity is at 23.7 million euros.
2018 2 nd quarter results are summarized below:
- Unaudited consolidated revenue 22.15 million euros, increase +9.08 million euros, i.e. +69.5%.
- Gross margin 7.7%, increase +0.2 percentage points, i.e. +2.5%.
- Positive impact from revaluation of biological assets +1.10 million euros (Q2 2017: positive effect +0.42 million euros).
- Effect of one-offs to the result -0.51 million euros (12 month 2016: negative influence -0.21 million euros).
- EBITDA from operations -0.23 million euros, decrease -0.36 million euros.
- EBITDA +0.36 million euros, increase +0.02 million euros (without one-off effects EBITDA +0.87 million euros, increase +0.32 million euros).
- The operating loss -0.13 million euros, increase -0.16 million euros (without one-off effects operating profit +0.38 million euros, increase +0.14 million euros).
- Net loss -0.64 million euros, increase -0.51 million (without one-off effects net loss -0.13 million euros, increase -0.21 million euros.
2 nd quarter results are as expected. Change in raw material price was bigger than anticipated, and as result the profitability of fresh Fish trading was lower. The sale of fresh Fish was also lower in Finland due to the loss of major client. At the same time, we gained new clients in European Union and see significant growth in sales to Asia.
Management is content with financial year results. We would like to thank our clients and partners and hope to be an inspirational employer in our sector.
Quarterly presentation will be published on our website latest with annual report.
KEY RATIOS
| Income Statement, EUR mln | Q2 2018 | Q2 2017 | 18m 2017 | 12m 2017 | 12m 2016 |
| Sales | 22.1 | 13.1 | 118.5 | 73.6 | 47.4 |
| Gross profit | 1.7 | 1.0 | 14.7 | 10.5 | 4.0 |
| EBITDA from operations | -0.2 | 0.1 | 5.8 | 5.4 | 0.8 |
| EBITDA | 0.4 | 0.3 | 4.5 | 3.6 | 2.6 |
| EBIT | -0.1 | 0.03 | 1.8 | 1.9 | 1.4 |
| EBT | -0.5 | -0.1 | 0.3 | 1.1 | 1.1 |
| Net profit (-loss) | -0.6 | -0.1 | 0.3 | 1.3 | 0.7 |
| Gross margin | 7.7% | 7.5% | 12.4% | 14.3% | 8.5% |
| Operational EBITDA margin | -1.0% | 1.0% | 4.9% | 7.3% | 1.6% |
| EBITDA margin | 1.6% | 2.6% | 3.8% | 4.8% | 5.5% |
| EBIT margin | -0.6% | 0.2% | 1.6% | 2.6% | 2.9% |
| EBT margin | -2.0% | -0.4% | 0.3% | 1.5% | 2.4% |
| Net margin | -2.9% | -1.0% | 0.3% | 1.8% | 1.5% |
| Operating expense ratio | 11.7% | 9.5% | 10.4% | 10.0% | 10.1% |
| Balance Sheet, EUR mln | 31.03.2018 | 31.03.2017 | 31.12.2017 | 31.12.2016 |
| Net debt | 18.1 | 1.0 | 16.6 | 0.3 |
| Equity | 23.7 | 22.7 | 24.7 | 23.8 |
| Working capital | 2.8 | 11.5 | 5.3 | 12.4 |
| Assets | 66.0 | 33.5 | 68.6 | 35.1 |
| Liquidity ratio | 1.1 | 2.3 | 1.2 | 2.4 |
| Equity ratio | 35.9% | 67.8% | 36.0% | 67.9% |
| Gearing ratio | 43.3% | 4.1% | 40.1% | 1.2% |
| Net debt-to-EBITDA | 3.0 | 1.6 | 3.1 | 0.4 |
| ROE | 5.6% | 0.7% | 1.3% | 3.0% |
| ROA | 2.6% | 0.5% | 2.5% | 2.2% |
Consolidated statement of financial position
| EUR '000 | 30.06.2018 | 30.06.2017 | 31.12.2017 | 31.12.2016 |
| ASSETS | ||||
| Cash and cash equivalents | 5,961 | 4,088 | 6,491 | 4,374 |
| Receivables and prepayments | 4,912 | 2,694 | 8,982 | 4,056 |
| Inventories | 12,677 | 5,105 | 11,747 | 5,393 |
| Biological assets | 6,498 | 8,251 | 5,566 | 7,584 |
| Total current assets | 30,048 | 20,138 | 32,786 | 21,407 |
| Deferred income tax | 212 | 226 | 222 | 230 |
| Long-term financial investments | 134 | 102 | 102 | 103 |
| Tangible fixed assets | 12,730 | 7,019 | 13,225 | 7,285 |
| Intangible assets | 22,877 | 5,981 | 22,294 | 6,031 |
| Total non-current assets | 35,953 | 13,328 | 35,843 | 13,649 |
| TOTAL ASSETS | 66,001 | 33,466 | 68,629 | 35,056 |
| EQUITY AND LIABILITIES | ||||
| Loans and borrowings | 12,562 | 4,266 | 10,105 | 3,716 |
| Payables | 14,422 | 4,243 | 17,115 | 5,131 |
| Government grants | 216 | 170 | 306 | 162 |
| Total current liabilities | 27,200 | 8,679 | 27,526 | 9,009 |
| Loans and borrowings | 11,460 | 788 | 12,957 | 940 |
| Deferred tax liabilities | 2,436 | 758 | 2,267 | 747 |
| Government grants | 1,226 | 544 | 1,144 | 551 |
| Total non-current liabilities | 15,122 | 2,090 | 16,368 | 2,238 |
| TOTAL LIABILITIES | 42,322 | 10,769 | 43,894 | 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 | 48 | 48 | 12 |
| Currency translation reserve | 111 | 417 | 173 | 428 |
| Retained profit (-loss) | 2,151 | 878 | 3,096 | 1,881 |
| Equity attributable to parent | 23,664 | 22,697 | 24,671 | 23,809 |
| Non-controlling interest | 15 | 0 | 64 | 0 |
| TOTAL EQUITY | 23,679 | 22,697 | 24,735 | 23,809 |
| TOTAL EQUITY AND LIABILITIES | 66,001 | 33,466 | 68,629 | 35,056 |
Consolidated statement of profit or loss and other comprehensive income
| EUR '000 | Q2 2018 | Q2 2017 | 18m 2017 | 12m 2017 | 12m 2016 |
| Sales | 22,149 | 13,066 | 118,499 | 73,610 | 47,429 |
| Cost of goods sold | -20,436 | -12,081 | -103,836 | -63,075 | -43,410 |
| Gross profit | 1,713 | 985 | 14,663 | 10,535 | 4,019 |
| Operating expenses | -2,591 | -1,237 | -12,336 | -7,365 | -4,785 |
| Selling and distribution expenses | -1,900 | -879 | -8,797 | -5,209 | -3,346 |
| Administrative expenses | -691 | -358 | -3,539 | -2,156 | -1,439 |
| Other income/expenses | -352 | -138 | 40 | 240 | -118 |
| Fair value adjustment on biological assets | 1,099 | 420 | -524 | -1,505 | 2,263 |
| Operating profit (-loss) | -131 | 30 | 1,843 | 1,905 | 1,379 |
| Financial income | 4 | -5 | 10 | 4 | 2 |
| Financial expenses | -326 | -80 | -1,519 | -802 | -240 |
| Profit (-loss) before tax | -453 | -55 | 334 | 1,107 | 1,141 |
| Income tax | -189 | -73 | -13 | 208 | -426 |
| Net profit (-loss) for the period | -642 | -128 | 321 | 1,315 | 715 |
| Net profit (-loss) attributable to: | |||||
| Owners of the company | -585 | -128 | 306 | 1,251 | 715 |
| Non-controlling interests | -57 | 0 | 15 | 64 | 0 |
| Total net profit (-loss) | -642 | -128 | 321 | 1,315 | 715 |
| Other comprehensive income (-loss) that may subsequently be classified to profit or loss: | |||||
| Foreign currency translation differences | -1 | -11 | -317 | -255 | -43 |
| Total comprehensive income (-expense) | -643 | -139 | 4 | 1,060 | 672 |
| Total comprehensive income (-expense) attributable to: | |||||
| Owners of the Company | -586 | -139 | -11 | 996 | 672 |
| Non-controlling interests | -57 | 0 | 15 | 64 | 0 |
| Total comprehensive income (-expense) for the period | -643 | -139 | 4 | 1,060 | 672 |
| Profit (-loss) per share (EUR) | -0.02 | 0.00 | 0.00 | 0.03 | 0.02 |
| Diluted profit (-loss) per share (EUR) | -0.02 | 0.00 | 0.00 | 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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