Consolidated Unaudited Interim Report of AS PRFoods for the 2nd quarter and 6 months of 2023/2024 financial year

MANAGEMENT COMMENTARY

First half-year of PRFoods has ended. The major changes are related to the sale of its subsidiary Redstorm OÜ. Additionally, one fish farming license was sold for 2,5 million euros to the same buyer in November. The sale of Redstorm and the fish farming license resulted in a one-time loss for the Group totalling 0,3 million euros, while the transaction's impact, excluding goodwill, resulted in a one-time profit of 1,9 million euros. Due to the sale of Redstorm, the turnover decreased by over 25% in the second quarter and in the first half-year, totalling 5,4 million euros and 8,9 million euros respectively. The gross profit for the second quarter remained the same as the previous year at 1,6 million euros, despite lower turnover. EBITDA from operations in the second quarter decreased by 37.5% to 0,5 million euros. The decline in EBITDA compared to the previous year is due to higher sales and marketing expenses at the John Ross Jr unit and seasonally higher inventory purchases of fish for subsequent quarters.

The gross profit for the first half-year was 1,7 million euros, 19% less than the same period last year, directly attributable to the decrease in turnover due to the sale of the subsidiary Redstorm OÜ. EBITDA from operations for the first half-year was -0,2 million euros, influenced by the significant loss in Estonia in the first quarter. The loss in Estonia was affected by a non-compete clause in Finland, which has since expired, and its positive impact will be seen in the turnover and results for the third quarter ending on March 31st.

The net loss for the second quarter was 0,7 million euros, compared to a net loss of 0,1 million euros in the same period last year. This was influenced by one-time financial costs totaling 0,5 million euros, of which 0,3 million euros are related to the one-time non cash loss from the sale of Redstorm. At the beginning of 2024, the company completed a partial redemption of bonds amounting to 1.4 million euros.

The net loss for the first half-year was -1,4 million euros. The net profit for the first half-year of the previous year was 0,7 million euros, influenced by a one-time profit of 1,4 million euros from the sale of a subsidiary in Sweden.

The company's liquidity position has improved due to the sale of the subsidiary Redstorm OÜ, resulting in a reduction in both the volume of bonds and the repayment of the MES loan. The company's liquidity ratio was 1,5 at the end of the year.

John Ross Jr. continues to operate profitably (the company has never incurred an annual loss during its operations), but the results of Saare Kala Tootmine OÜ were below expectations, directly influenced by the non-compete clause and the discontinuation of our products' intermediation by our former Finnish partner. By now, we have resumed direct sales with our old customers, for whom the non-compete clause regarding direct sales expired at the end of 2023.

However, it should be noted that due to the economic downturn in Estonia and general consumer behavior, demand for fish products in Estonia has significantly decreased overall. Despite the decreased market conditions, Saare Kala Tootmine has managed to increase its market share at the expense of competitors. We predict that the consumption downturn will continue in Estonia and Finland in 2024.

Regarding John Ross Jr, we anticipate EBITDA growth compared to last year since their sales area is much broader and less dependent on a single market. However, we do not expect significant revenue growth for John Ross Jr. this year. Saare Kala Tootmine aims to end the second half-year with marginal profit, due to the return to the Finnish market since the beginning of the year.

The restructuring of management of PRFoods has also ended and as of March 31, PRFoods will continue with existing board members of Kristjan Kotkas and Timo Pärn. Timo has demonstrated in short time that despite the challenges in Estonia, he has accomplished in short period necessary changes in sales and production. Since the sale of fish farming business, the need of administration on group level has diminished and this allows also cost savings on group level. Indrek Kasela will transfer from board position to supervisory board after such decision is taken by PRFoods shareholders meeting.

KEY RATIOS

INCOME STATEMENT

mln EUR
unless indicated otherwise		2Q 2023/20242022/20232Q 2022/20232021/2022
     
Sales5,419,67,342,1
Gross profit1,63,61,63,1
EBITDA from operations0,50,30,8-1,7
EBITDA0,50,30,8-2,1
EBIT-0,03-1,00,2-4,2
EBT-0,60,4-0,0-8,2
Net profit (loss)-0,70,3-0,1-8,2
Gross margin29,7%18,3%22,1%7,4%
Operational EBITDA margin10,1%1,5%11,3%-4,6%
EBITDA margin10,1%1,5%11,3%-5,1%
EBIT margin-0,6%-5,1%2,9%-9,9%
EBT margin-10,4%2,0%-0,5%-19,5%
Net margin-12,2%1,5%-1,8%-19,4%
Operating expense ratio-30,1%24,0%-18,9%17,1%

BALANCE SHEET

mln EUR
unless indicated otherwise		31.12.202330.06.202331.12.202230.06.2022
     
Net debt15,916,717,724,7
Equity6,48,37,58,1
Working capital2,90,00,0-3,2
Assets28,630,232,238,9
Liquidity ratio1,5x1,0x1,0x0,7x
Equity ratio22,4%27,4%23,3%20,7%
Gearing ratio71,3%66,9%70,2%75,4%
Debt to total assets0,8x0,7x0,8x0,8x
Net debt to operating EBITDA21,4x55,8x21,4x-14,5x
ROE-9,1%4,1%-1,7%-68,5%
ROA-2,3%1,0%-0,4%-17,3%

Consolidated statement of Financial Position

EUR '00031.12.202331.12.202230.06.2023
VARAD   
Cash and cash equivalents580386394
Receivables and prepayments5 7905 0162 118
Inventories2 4202 0891 861
Biological assets00772
Total current assets8 7907 4915 145
    
Long-term financial assets372304381
Tangible assets4 4296 9446 563
Intangible assets14 98317 44318 157
Total non-current assets19 78424 69125 101
TOTAL ASSETS28 574 32 182 30 246
    
EQUITY AND LIABILITIES   
Interest-bearing liabilities1 8052 7772 111
Payables and prepayments4 0474 6723 035
Total current liabilities5 8527 4495 146
    
Interest-bearing liabilities14 66615 27015 024
Deferred tax liabilities1 4341 6441 466
Government grants233327318
Total non-current liabilities16 33417 24116 807
TOTAL LIABILITIES22 186 24 690 21 953
    
Share capital7 7377 7377 737
Share premium14 00714 00714 007
Treasury shares-390-390-390
Statutory capital reserve515151
Currency translation differences369394608
Retained profit (-loss)-15 386-14 605-13 981
Equity attributable to parent6 3887 1948 032
Non-controlling interest0297259
TOTAL EQUITY6 388 7 491 8 292
TOTAL EQUITY AND LIABILITIES28 57432 18230 246

Consolidated Statement of Profit or Loss and Other Comprehensive Income

EUR '0002Q 2023/20242Q 2022/20236m 2023/20246m 2022/2023
Revenue5 4457 3008 85611 910
Cost of goods sold-3 827-5 688-7 117-9 785
Gross profit1 6181 6121 7392 125
     
Operating expenses-1 642-1 379-2 509-2 493
Selling and distribution expenses-910-671-1 348-1 314
Administrative expenses-732-708-1 161-1 179
Other income / expense-11-21-20-68
Fair value adjustment on biological assets00358-170
Operating profit (-loss)-35212-432-606
Financial income / expenses-535-245-8421 447
Profit (-loss) before tax-569-33-1 274841
Income tax-97-102-110-108
Net profit (-loss) for the period-666-135- 1 385733
     
Net profit (-loss) attributable to:    
Owners of the Parent Company-708-210-1 382668
Non-controlling interests4275-466
Total net profit (-loss) for the period-666-135-1 386733
     
Other comprehensive income (-loss) that may subsequently be classified to profit or loss:    
Foreign currency translation differences        -430-239-445
Total comprehensive income (-expense)-709-135-1 625288
     
Total comprehensive income (-expense) attributable to:            
Owners of the Parent Company        -751-210-1 621223
Non-controlling interests        4275-466
Total comprehensive income (-expense) for the period-709-135-1 625288
     
Profit (-loss) per share (EUR)-0,02-0,01-0,040,02
     
Diluted profit (-loss) per share (EUR)-0,02-0,00-0,030,01

Indrek Kasela

AS PRFoods

Member of the Management Board

Phone:+372 452 1470

investor@prfoods.ee

www.prfoods.ee              

Attachment

  • PRF_interim_6m 2023_2024