PRFoods
Quarterly report
PRF: Consolidated Unaudited Interim Report of AS PRFoods for 3rd quarter and 9 months of 2017
Tallinn, Estonia, 2017-11-24 18:40 CET (GLOBE NEWSWIRE) --
Overview of the economic activities
MANAGEMENT COMMENTARY
PRFoods is delighted to present the first results after transformational acquisitions of John Ross Jr, Coln Valley and Trio Trading. Sales increase of 70.8% in 3 quarter and 36.3% increase of revenues in 9 months are obvious results, but also on standalone basis group companies have performed above the expectations. On pro forma annual basis 9 months revenues were 77.9 million euros and pro forma EBITDA 3.4 million euros. PRFoods consolidates according to IFRS acquired companies from moment of acquisition - John Ross John Ross Jr./Coln Valley from July 1, 2017 and Trio Trading from September 1, 2017.
PRFoods is very pleased with 3 quarter revenues of 17.99 million results, but even more importantly we managed to increase our gross margin by 191.2%. Gross profit increased by 397.6% or 1.97 million euros and was 2.47 million euros.
3 quarter operational EBITDA improved by 1.51 million euros on year-on-year basis and was 1.23 million euros.
9 months consolidated revenues were 41.62 million euros, increase of 36.3%. Gross profit increased by 90.6% and was 3.98 million euros. EBITDA from operations increased by 455.0% and was 1.07 million.
While increasing our revenues, we have been very conscious of our cost base and I am happy to report that our operating costs on 9 months basis decreased from 11.43% to 10.51%.
Main reasons for increase of the operational profitability is attributed to the decrease of raw material prices, particularly salmon, which represents now higher proportion of our business. Secondly, the good work of our sales teams in increasing end product prices. Thirdly, with newly acquired companies John Ross Jr. and Coln Valley, PRFoods entered a higher margin luxury segment. Trio Trading has been a very valuable addition in providing access to raw material and increasing our sales of fresh products. Since Trio Trading's main business is sourcing raw material and selling of fresh fish with quick turnover, the Group is less exposed to sudden fluctuations in raw material prices, compared older business model where retail prices were fixed for longer period.
Fish farming contribution was less in 3 quarter compared to year ago, which is in line with our expectation. Positive impact of biomass revaluation was 1.07 million euros in 3 quarter compared to 2.90 million euros year ago. 3 quarter 2016 was very unusual, and now we see normalization of the fish prices. Rainbow trout prices remain high, giving us very good advantage compared to other producers. Our biomass is currently 10.55 million euros and harvest amounts are slightly higher compared to last year.
Since biomass contribution was less in 3 quarter 2017 as year ago, consolidated EBITDA was 2.21 million euros, down 15.8% on year-on-year. Net profit for 9 months was 1.15 million euros compared to 1.63 year ago.
Net debt of the company is 16.7 million euros due to the acquisitions, but overall financial stability of the company remains good and our operational cash flows are improving.
The first effects of synergies are already evident in increased sales and operational profitability. We are happy to say that first Scandinavian-Scottish products have been successfully listed in United Kingdom and German retailers and new products have won several accolades.
As a management we are pleased to see that the multi-national teams are working well together in achieving even better results and building something very exciting in fish sector.
Lower raw material prices allow us to look optimistically towards successful end of the year, particularly in our Scandinavian units. Weaker British pound affects John Ross Jr and Coln Valley results in consolidated reports in euros, but on the standalone basis our UK unit is performing very well.
PRFoods is planning to hold on 11.12.2017 extraordinary shareholders meeting to change our financial year, to be in line with financial year of John Ross Jr, Coln Valley and Trio Trading. Current financial year will be extended until 30.06.2018 and in future PRFoods financial year will run from July to June.
PRFoods is pleased to see that our share is one of the best performing shares on Tallinn Stock Exchange, annualized return being 50.68%.
2017 has been very transformational for our business, but as management, we believe this is just the beginning of our new journey. I would like to thank entire team of our companies for their effort and professionalism.
The 3 quarter of 2017 compared to the 3 quarter of 2016
- Unaudited consolidated revenue 17.99 million euros, increase +7.46 million euros, i.e. +70.8%.
- Gross margin 13.7%, increase +9.0 percentage points, i.e. +191.2%.
- Positive impact from revaluation of biological assets +1.07 million euros (Q3 2016: positive effect +2.90 million euros).
- EBITDA from operations +1.23 million euros, increase +1.51 million euros.
- EBITDA +2.21 million euros, decrease -0.41 million euros (without one-off effects in 2017 EBITDA +2.31 million euros, decrease -0.32 million euros).
- The operating profit +1.79 million euros, decrease -0.53 million euros (without one-off effects operating profit +1.88 million euros, decrease -0.44 million euros).
- Net profit +1.15 million euros, decrease -0.48 million euros (without one-off effects net profit +1.25 million euros, decrease -0.38 million euros).
The 9 months of 2017 compared to the 9 months of 2016
- Unaudited consolidated revenue 41.62 million euros, increase +11.09 million euros, i.e. +36.3%.
- Gross margin 9.6%, increase +2.7 percentage points.
- Positive impact from revaluation of biological assets +1.22 million euros (9 months 2016: positive impact of +3.36 million euros).
- EBITDA from operations +1.07 million euros, increase +1.37 million euros.
- EBITDA +1.99 million euros, decrease -1.07 million euros (without one-off effects in 2017 EBITDA 2.29 million euros, decrease -0.77 million euros).
- The operating profit +0.95 million euros, decrease -1.19 million euros (without one-off effects in 2017 operating profit +1.25 million euros, decrease by -0.89 million euros).
- Net profit +0.18 million euros, decrease -1.02 million euros (without one-off effects in 2017 net profit +0.49 million euros, decrease -0.72 million euros).
KEY RATIOS
Income Statement, EUR mln | Q1 2017 | Q2 2017 | Q3 2017 | 9m 2017 | Q1 2016 | Q2 2016 | Q3 2016 | 9m 2016 | 12m 2016 |
Sales | 10.6 | 13.1 | 18.0 | 41.6 | 10.2 | 9.8 | 10.5 | 30.5 | 47.4 |
Gross profit | 0.5 | 1.0 | 2.5 | 4.0 | 1.0 | 0.6 | 0.5 | 2.1 | 4.0 |
EBITDA from operations | -0.3 | 0.1 | 1.2 | 1.1 | 0.2 | -0.3 | -0.3 | -0.30 | 0.8 |
EBITDA | -0.6 | 0.3 | 2.2 | 2.0 | -0.2 | 0.7 | 2.6 | 3.1 | 2.6 |
EBIT | -0.9 | 0.03 | 1.8 | 0.9 | -0.5 | 0.3 | 2.3 | 2.1 | 1.4 |
EBT | -0.9 | -0.1 | 1.4 | 0.4 | -0.6 | 0.2 | 2.2 | 1.9 | 1.1 |
Net profit (-loss) | -0.8 | -0.1 | 1.2 | 0.2 | -0.5 | 0.04 | 1.6 | 1.2 | 0.7 |
Gross margin | 5.0% | 7.5% | 13.7% | 9.6% | 9.5% | 6.3% | 4.7% | 6.8% | 8.5% |
Operational EBITDA margin | -2.7% | 1.0% | 6.9% | 2.6% | 2.1% | -2.6% | -2.6% | -1.0% | 1.6% |
EBITDA margin | -5.3% | 2.6% | 12.3% | 4.8% | -2.2% | 6.8% | 24.9% | 10.0% | 5.5% |
EBIT margin | -8.3% | 0.2% | 9.9% | 2.3% | -5.2% | 3.6% | 22.0% | 7.0% | 2.9% |
EBT margin | -8.5% | -0.4% | 7.6% | 1.0% | -5.5% | 2.3% | 21.3% | 6.2% | 2.4% |
Net margin | -7.9% | -1.0% | 6.4% | 0.4% | -4.5% | 0.4% | 15.5% | 4.0% | 1.5% |
Operating expense ratio | 11.2% | 9.5% | 10.9% | 10.5% | 10.5% | 12.7% | 11.2% | 11.4% | 10.1% |
Balance Sheet, EUR mln | 31.03.2017 | 30.06.2017 | 30.09.2017 | 31.03.2016 | 30.06.2016 | 30.09.2016 | 31.12.2016 |
Net debt | 1.6 | 1.0 | 16.7 | -3.1 | -1.4 | 1.3 | 0.3 |
Equity | 22.8 | 22.7 | 23.4 | 22.7 | 22.7 | 24.3 | 23.8 |
Working capital | 11.5 | 11.5 | 5.1 | 11.0 | 11.2 | 13.3 | 12.4 |
Assets | 33.3 | 33.5 | 66.3 | 28.6 | 29.3 | 34.4 | 35.1 |
Liquidity ratio | 2.4 | 2.3 | 1.2 | 3.7 | 3.4 | 2.7 | 2.4 |
Equity ratio | 68.5% | 67.8% | 35.9% | 79.4% | 77.6% | 70.7% | 67.9% |
Gearing ratio | 6.4% | 4.1% | 41.3% | -15.7% | -6.7% | 5.2% | 1.2% |
Net debt-to-EBITDA | 6.4 | 1.6 | 7.9 | -1.1 | -0.7 | 1.2 | 0.4 |
ROE | 1.5% | 0.7% | -1.3% | 4.5% | 3.6% | 6.7% | 3.0% |
ROA | 1.1% | 0.5% | -0.6% | 3.7% | 2.9% | 5.2% | 2.2% |
Consolidated statement of financial position
EUR '000 | 30.09.2017 | 30.09.2016 | 31.12.2016 |
ASSETS | |||
Cash and cash equivalents | 6,420 | 3,551 | 4,374 |
Receivables and prepayments | 6,102 | 2,543 | 4,056 |
Inventories | 8,641 | 4,205 | 5,393 |
Biological assets | 10,551 | 10,591 | 7,584 |
Total current assets | 31,714 | 20,890 | 21,407 |
Deferred income tax | 226 | 134 | 230 |
Long-term financial investments | 102 | 103 | 103 |
Tangible fixed assets | 11,729 | 7,242 | 7,285 |
Intangible assets | 22,503 | 6,047 | 6,031 |
Total non-current assets | 34,560 | 13,526 | 13,649 |
TOTAL ASSETS | 66,274 | 34,416 | 35,056 |
EQUITY AND LIABILITIES | |||
Loans and borrowings | 9,460 | 3,863 | 3,716 |
Payables | 16,831 | 3,509 | 5,131 |
Government grants | 307 | 244 | 162 |
Total current liabilities | 26,598 | 7,616 | 9,009 |
Loans and borrowings | 13,611 | 1,016 | 940 |
Deferred tax liabilities | 1,085 | 953 | 747 |
Government grants | 1,156 | 509 | 551 |
Total non-current liabilities | 15,902 | 2,478 | 2,238 |
TOTAL LIABILITIES | 42,500 | 10,094 | 11,247 |
Share capital | 7,737 | 7,737 | 7,737 |
Share premium | 14,007 | 14,007 | 14,007 |
Treasury shares | -390 | -227 | -256 |
Statutory capital reserve | 48 | 12 | 12 |
Currency translation reserve | 344 | 420 | 428 |
Retained profit (-loss) | 2,027 | 2,373 | 1,881 |
Equity attributable to parent | 23,774 | 24,322 | 23,809 |
Non-controlling interest | 1 | 0 | 0 |
TOTAL EQUITY | 23,774 | 24,322 | 23,809 |
TOTAL EQUITY AND LIABILITIES | 66,274 | 34,416 | 35,056 |
Consolidated statement of profit or loss and other comprehensive income
EUR '000 | Q3 2017 | Q3 2016 | 9m 2017 | 9m 2016 | 12m 2016 |
Sales | 17,990 | 10,530 | 41,618 | 30,526 | 47,429 |
Cost of goods sold | -15,522 | -10,034 | -37,639 | -28,438 | -43,410 |
Gross profit | 2,468 | 496 | 3,979 | 2,088 | 4,019 |
Operating expenses | -1,955 | -1,175 | -4,372 | -3,488 | -4,785 |
Selling and distribution expenses | -1,339 | -827 | -3,055 | -2,382 | -3,346 |
Administrative expenses | -617 | -348 | -1,317 | -1,106 | -1,439 |
Other income/expenses | 204 | 102 | 116 | 173 | -118 |
Fair value adjustment on biological assets | 1,072 | 2,898 | 1,222 | 3,364 | 2,263 |
Operating profit (-loss) | 1,788 | 2,321 | 945 | 2,137 | 1,379 |
Financial income | 1 | 0 | 2 | 1 | 2 |
Financial expenses | -426 | -76 | -540 | -231 | -240 |
Profit (-loss) before tax | 1,363 | 2,245 | 407 | 1,907 | 1,141 |
Income tax | -213 | -616 | -224 | -700 | -426 |
Net profit (-loss) for the period | 1,150 | 1,629 | 283 | 1,207 | 715 |
Net profit (-loss) attributable to: | |||||
Owners of the company | 1,149 | 1,629 | 182 | 1,207 | 715 |
Non-controlling interests | 1 | 0 | 1 | 0 | 0 |
Total net profit (-loss) | 1,150 | 1,629 | 183 | 1,207 | 715 |
Other comprehensive income (-loss) that may subsequently be classified to profit or loss: | |||||
Foreign currency translation differences | -73 | -21 | -84 | -51 | -43 |
Total comprehensive income (-expense) | 1,077 | 1,608 | 99 | 1,156 | 672 |
Total comprehensive income (-expense) attributable to: | |||||
Owners of the Company | 1,076 | 1,608 | 98 | 1,156 | 672 |
Non-controlling interests | 1 | 0 | 1 | 0 | 0 |
Total comprehensive income (-expense) for the period | 1,077 | 1,608 | 99 | 1,156 | 672 |
Profit (-loss) per share (EUR) | 0.03 | 0.04 | 0.00 | 0.03 | 0.02 |
Diluted profit (-loss) per share (EUR) | 0.03 | 0.04 | 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
PRFoods AS published this content on 24 November 2017 and is solely responsible for the information contained herein.
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