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 20179m 2017 Q1 2016 Q2 2016 Q3 20169m 2016 12m 2016
Sales 10.6 13.1 18.041.6 10.2 9.8 10.530.5 47.4
Gross profit 0.5 1.0 2.54.0 1.0 0.6 0.52.1 4.0
EBITDA from operations -0.3 0.1 1.21.1 0.2 -0.3 -0.3-0.30 0.8
EBITDA -0.6 0.3 2.22.0 -0.2 0.7 2.63.1 2.6
EBIT -0.9 0.03 1.80.9 -0.5 0.3 2.32.1 1.4
EBT -0.9 -0.1 1.40.4 -0.6 0.2 2.21.9 1.1
Net profit (-loss) -0.8 -0.1 1.20.2 -0.5 0.04 1.61.2 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 30.06.201730.09.2017 31.03.2016 30.06.201630.09.2016 31.12.2016
Net debt 1.6 1.016.7 -3.1 -1.41.3 0.3
Equity 22.8 22.723.4 22.7 22.724.3 23.8
Working capital 11.5 11.55.1 11.0 11.213.3 12.4
Assets 33.3 33.566.3 28.6 29.334.4 35.1
Liquidity ratio 2.4 2.31.2 3.7 3.42.7 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 1.67.9 -1.1 -0.71.2 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 '00030.09.201730.09.201631.12.2016
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 assets31,71420,89021,407
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 assets34,56013,52613,649
TOTAL ASSETS66,27434,41635,056
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 liabilities26,5987,6169,009
Loans and borrowings 13,611 1,016 940
Deferred tax liabilities 1,085 953 747
Government grants 1,156 509 551
Total non-current liabilities15,9022,4782,238
TOTAL LIABILITIES42,50010,09411,247
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 EQUITY23,77424,32223,809
TOTAL EQUITY AND LIABILITIES66,27434,41635,056

Consolidated statement of profit or loss and other comprehensive income

EUR '000Q3 2017Q3 20169m 20179m 201612m 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 profit2,4684963,9792,0884,019
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)1,7882,3219452,1371,379
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 period1,1501,6292831,207715
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)1,1501,6291831,207715
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)1,0771,608991,156672
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 period1,0771,608991,156672
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.
Distributed by Public, unedited and unaltered, on 24 November 2017 17:46:08 UTC.

Original documenthttp://www.nasdaqbaltic.com/market/?pg=details&instrument=EE3100101031&list=2&tab=news&news_id=294709

Public permalinkhttp://www.publicnow.com/view/D3F4CFCB6555C9FE63D1E0D95D6E1F0AA6AE5A8B