PRF: Consolidated Unaudited Interim Report of AS PRFoods for 4th quarter and 12 months of 2017Tallinn, Estonia, 2018-02-24 23:10 CET --
Overview of the economic activities
MANAGEMENT COMMENTARY
PRFoods Q4 2017 is the first when new group’s full term consolidated numbers are available. It is a pleasure to see that then new strategy of PRFoods to become high value added and vertically integrated International fish processing company, has been fully justified. Strong growth in sales and profitability demonstrate it clearly. Both the existing and newly added PRFoods subsidiaries have performed exceptionally, thanks to good work and effort by our local management teams and entire staff.
PRFoods Q4 revenues were 32 million euros, growing year-on-year by 89.3%. Gross margin increased 3.4 times and was 6.6 million euros. EBITDA from operations (excluding biomass) grew by 3.2 times and was 4.3 million euros. EBITDA growth was 4.5 times and amounted 1.6 million euros. Net profit was 1.2 million euros, increase by 3.5 times year-on-year. We are happy to see that gross margin growth on year-on-year was 80.5%, Q4 gross margins was 20.6%.
Sales and profitability were particularly boosted by strong sales in Finnish market, as a result of very successful integration between Trio Trading Ab, Heimon Kala Oy and Vettel OÜ. Business was helped by substantial decrease in raw material prices, as compared to extraordinarily high prices in Q4 2016. It is very positive to see that sales to export markets has grown significantly.
PRFoods 12 months unaudited consolidated sales were 73.6 million euros, growing 55.2% on annual basis. EBITDA from operations increased 7 times and was 5.4 million euros. EBITDA was 3.6 million euros, growing by 0.95 million euros year-on-year. Net profit grew 2 times and amounted to 1.4 million euros.
Our fish farming performed very well, the biggest impact came from drop in global salmon prices. The difference between operational EBITDA and EBITDA is the biomass revaluation. At the end of 2017 the biomass revaluation amounted to -1.5 million euros, compared to +2.3 million in 2016. Biomass revaluation is standard practice and is impacted mainly by three factors: global fish prices at the end of the period, annual biomass growth in tons annual extraction of fish from farms. Although in tons our biomass increased, in value terms the biomass decreased due to drop in rainbow trout prices by 19.5% as of 31.12.2017. Rainbow trout prices were 6.0 euros per kilo compared to 7.4 euros at the end of 2016. Also, salmon prices decreased in Q4 by 29.9% year-on-year and by 39.2 if compared to 31.12.2016. Both trends are very positive for PRFoods, as over 2/3 of our raw material is purchased on open market. Raw material price drop boosts overall profitability of our business. The value of biomass at the end of the year was 5.6 million euros and average price was 3.87 EUR/kg.
PRFoods balance sheet continues to be strong. Investment loans taken to purchase subsidiaries have resulted in positive net debt. Debt to EBITDA is 3.1. Cash balance increased to 6.5 million euros and net debt of PRFoods is 16.6 million euros (including 2.6 million euros of minority buyout option liabilities, which the management deems to be of low probability in short term).
PRFoods employs 408 people as of end of the year in Estonia, Finland, Sweden and United Kingdom
PRFoods shares rose by 63.2% on annual basis, being one of the best performing stocks on NASDAQ Tallinn. The liquidity of share trading increased nearly 2 times.
Current financial year was prolonged until 30.06.2018 and in the future PRFoods financial year is from July to June.
In summary we can say that 2017 was very successful for PRFoods. Big challenges wait us ahead, to turn PRFoods subsidiaries into even more globally competitive businesses. Strategic directions of group are increasing profitability, sustainable and environmentally friendly production, innovation in product development and marketing, development of our staff’s professionalism and working conditions.
The 4th quarter of 2017 compared to the 4th quarter of 2016
-
Unaudited consolidated revenue 31.99 million euros, increase +15.09 million euros, i.e. +89.3%.
-
Gross margin 20.6%, increase +9.2 percentage points, i.e. +80.5%.
-
Negative impact from revaluation of biological assets -2.73 million euros (Q4 2016: negative effect -1.10 million euros).
-
EBITDA from operations +4.30 million euros, increase +3.25 million euros.
-
EBITDA +1.57 million euros, increase +2.02 million euros.
-
The operating profit +1.06 million euros, increase 1.82 million euros.
-
Net profit +1.23 million euros, increase +1.72 million.
The 12 months of 2017 compared to the 12 months of 2016
-
Unaudited consolidated revenue 73.61 million euros, increase +26.18 million euros, i.e. +55.2%.
-
Gross margin 14.4%, increase +5.9 percentage points.
-
Negative impact from revaluation of biological assets -1.51 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 +5.37 million euros, increase +4.62 million euros.
-
EBITDA +3.56 million euros, increase 0.95 million euros.
-
The operating profit +2.01 million euros, increase 0.63 million euros.
-
Net profit +1.42 million euros, increase 0.70 million euros.
KEY RATIOS
|
Income Statement, EUR mln |
Q1 2017 |
Q2 2017 |
Q3 2017 |
Q4 2017 |
12m 2017 |
Q1 2016 |
Q2 2016 |
Q3 2016 |
Q4 2016 |
12m 2016 |
|
Sales |
10.6 |
13.1 |
18.0 |
32.0 |
73.6 |
10.2 |
9.8 |
10.5 |
16.9 |
47.4 |
|
Gross profit |
0.5 |
1.0 |
2.5 |
6.6 |
10.6 |
1.0 |
0.6 |
0.5 |
1.9 |
4.0 |
|
EBITDA from operations |
-0.3 |
0.1 |
1.2 |
4.3 |
5.4 |
0.2 |
-0.3 |
-0.3 |
1.1 |
0.8 |
|
EBITDA |
-0.6 |
0.3 |
2.2 |
1.6 |
3.6 |
-0.2 |
0.7 |
2.6 |
-0.4 |
2.6 |
|
EBIT |
-0.9 |
0.03 |
1.8 |
1.1 |
2.0 |
-0.5 |
0.3 |
2.3 |
-0.8 |
1.4 |
|
EBT |
-0.9 |
-0.1 |
1.4 |
0.8 |
1.2 |
-0.6 |
0.2 |
2.2 |
-0.8 |
1.1 |
|
Net profit (-loss) |
-0.8 |
-0.1 |
1.2 |
1.2 |
1.4 |
-0.5 |
0.04 |
1.6 |
-0.5 |
0.7 |
|
Gross margin |
5.0% |
7.5% |
13.7% |
20.6% |
14.4% |
9.5% |
6.3% |
4.7% |
11.4% |
8.5% |
|
Operational EBITDA margin |
-2.7% |
1.0% |
6.9% |
13.4% |
7.3% |
2.1% |
-2.6% |
-2.6% |
6.2% |
1.6% |
|
EBITDA margin |
-5.3% |
2.6% |
12.3% |
4.9% |
4.8% |
-2.2% |
6.8% |
24.9% |
-2.7% |
5.5% |
|
EBIT margin |
-8.3% |
0.2% |
9.9% |
3.3% |
2.7% |
-5.2% |
3.6% |
22.0% |
-4.5% |
2.9% |
|
EBT margin |
-8.5% |
-0.4% |
7.6% |
2.5% |
1.6% |
-5.5% |
2.3% |
21.3% |
-4.5% |
2.4% |
|
Net margin |
-7.9% |
-1.0% |
6.4% |
3.9% |
1.9% |
-4.5% |
0.4% |
15.5% |
-2.9% |
1.5% |
|
Operating expense ratio |
11.2% |
9.5% |
10.9% |
9.2% |
9.9% |
10.5% |
12.7% |
11.2% |
7.7% |
10.1% |
|
Balance Sheet, EUR mln |
31.03.2017 |
30.06.2017 |
30.09.2017 |
31.12.2017 |
31.03.2016 |
30.06.2016 |
30.09.2016 |
31.12.2016 |
|
Net debt |
1.6 |
1.0 |
16.7 |
16.6 |
-3.1 |
-1.4 |
1.3 |
0.3 |
|
Equity |
22.8 |
22.7 |
23.4 |
24.8 |
22.7 |
22.7 |
24.3 |
23.8 |
|
Working capital |
11.5 |
11.5 |
5.1 |
5.3 |
11.0 |
11.2 |
13.3 |
12.4 |
|
Assets |
33.3 |
33.5 |
66.3 |
67.0 |
28.6 |
29.3 |
34.4 |
35.1 |
|
Liquidity ratio |
2.4 |
2.3 |
1.2 |
1.2 |
3.7 |
3.4 |
2.7 |
2.4 |
|
Equity ratio |
68.5% |
67.8% |
35.9% |
37.1% |
79.4% |
77.6% |
70.7% |
67.9% |
|
Gearing ratio |
6.4% |
4.1% |
41.3% |
40.0% |
-15.7% |
-6.7% |
5.2% |
1.2% |
|
Net debt-to-EBITDA |
6.4 |
1.6 |
7.9 |
3.1 |
-1.1 |
-0.7 |
1.2 |
0.4 |
|
ROE |
1.5% |
0.7% |
-1.3% |
5.8% |
4.5% |
3.6% |
6.7% |
3.0% |
|
ROA |
1.1% |
0.5% |
-0.6% |
2.8% |
3.7% |
2.9% |
5.2% |
2.2% |
Consolidated statement of financial position
|
EUR '000 |
31.12.2017 |
31.12.2016 |
|
ASSETS |
|
|
|
Cash and cash equivalents |
6,491 |
4,374 |
|
Receivables and prepayments |
8,982 |
4,056 |
|
Inventories |
11,747 |
5,393 |
|
Biological assets |
5,566 |
7,584 |
|
Total current assets |
32,786 |
21,407 |
|
|
|
|
|
Deferred income tax |
222 |
230 |
|
Long-term financial investments |
102 |
103 |
|
Tangible fixed assets |
11,425 |
7,285 |
|
Intangible assets |
22,450 |
6,031 |
|
Total non-current assets |
34,199 |
13,649 |
|
TOTAL ASSETS |
66,985 |
35,056 |
|
|
|
|
|
EQUITY AND LIABILITIES |
|
|
|
Loans and borrowings |
10,105 |
3,716 |
|
Payables |
17,115 |
5,131 |
|
Government grants |
306 |
162 |
|
Total current liabilities |
27,526 |
9,009 |
|
|
|
|
|
Loans and borrowings |
12,957 |
940 |
|
Deferred tax liabilities |
523 |
747 |
|
Government grants |
1,144 |
551 |
|
Total non-current liabilities |
14,624 |
2,238 |
|
TOTAL LIABILITIES |
42,150 |
11,247 |
|
|
|
|
|
Share capital |
7,737 |
7,737 |
|
Share premium |
14,007 |
14,007 |
|
Treasury shares |
-390 |
-256 |
|
Statutory capital reserve |
48 |
12 |
|
Currency translation reserve |
173 |
428 |
|
Retained profit (-loss) |
3,185 |
1,881 |
|
Equity attributable to parent |
24,760 |
23,809 |
|
Non-controlling interest |
75 |
0 |
|
TOTAL EQUITY |
24,835 |
23,809 |
|
TOTAL EQUITY AND LIABILITIES |
66,985 |
35,056 |
Consolidated statement of profit or loss and other comprehensive income
|
EUR '000 |
Q4 2017 |
Q4 2016 |
12m 2017 |
12m 2016 |
|
Sales |
31,992 |
16,903 |
73,610 |
47,429 |
|
Cost of goods sold |
-25,395 |
-14,972 |
-63,034 |
-43,410 |
|
Gross profit |
6,597 |
1,931 |
10,576 |
4,019 |
|
|
|
|
|
|
|
Operating expenses |
-2,934 |
-1,297 |
-7,306 |
-4,785 |
|
Selling and distribution expenses |
-2,095 |
-964 |
-5,150 |
-3,346 |
|
Administrative expenses |
-839 |
-333 |
-2,156 |
-1,439 |
|
Other income/expenses |
124 |
-291 |
240 |
-118 |
|
Fair value adjustment on biological assets |
-2,727 |
-1,101 |
-1,505 |
2,263 |
|
Operating profit (-loss) |
1,060 |
-758 |
2,005 |
1,379 |
|
Financial income |
2 |
1 |
4 |
2 |
|
Financial expenses |
-262 |
-9 |
-802 |
-240 |
|
Profit (-loss) before tax |
800 |
-766 |
1,207 |
1,141 |
|
Income tax |
432 |
274 |
208 |
-426 |
|
Net profit (-loss) for the period |
1,232 |
-492 |
1,415 |
715 |
|
|
|
|
|
|
|
Net profit (-loss) attributable to: |
|
|
|
|
|
Owners of the company |
1,157 |
-492 |
1,340 |
715 |
|
Non-controlling interests |
75 |
0 |
75 |
0 |
|
Total net profit (-loss) |
1,232 |
-492 |
1,415 |
715 |
|
|
|
|
|
|
|
Other comprehensive income (-loss) that may subsequently be classified to profit or loss: |
|
|
|
|
|
Foreign currency translation differences |
-171 |
8 |
-255 |
-43 |
|
Total comprehensive income (-expense) |
1,061 |
-484 |
1,160 |
672 |
|
|
|
|
|
|
|
Total comprehensive income (-expense) attributable to: |
|
|
|
|
|
Owners of the Company |
986 |
-484 |
1,085 |
672 |
|
Non-controlling interests |
75 |
0 |
75 |
0 |
|
Total comprehensive income (-expense) for the period |
1,061 |
-484 |
1,160 |
672 |
|
|
|
|
|
|
|
Profit (-loss) per share (EUR) |
0.03 |
-0.01 |
0.03 |
0.02 |
|
|
|
|
|
|
|
Diluted profit (-loss) per share (EUR) |
0.03 |
-0.01 |
0.03 |
0.02 |
Indrek Kasela
AS PRFoods
Member of the Management Board
Phone: +372 452 1470
investor@prfoods.ee
www.prfoods.ee
|