OREANDA-NEWS. Consolidated Unaudited Interim Report of AS PRFoods for 1st quarter of 2016

MANAGEMENT COMMENTARY

The financial results of Q1 2016 are satisfying.  In spite of the fact that the Company lost several private labels and HoReCa products from its product portfolio, we managed to keep quarter sales on the same level with the same period on previous year. Price surge of salmon has not yet been transferred to end products since correction of prices in retail market are with inertia, therefore correction of end prices should take place in the second half of the year. The Company’s profit before taxes and amortization (EBITDA) improved by half at the same time compared to the same period in previous year. The Group balance sheet is strong which helps us resist unsteady market situation. Additionally, the Company extended the overdraft contract in SEB Bank by a year. The Group has not included any foreign resources or bank loans in its financing activities.

The Group management is sparingly optimistic with the financial year of 2016. The biggest risk is increase in salmon prices, which is a result of deficiency in the international market. Increase in salmon prices remains limited, though, while all of the offerors, including retail market, are forced to increase prices. The main question is how long will the salmon deficiency continue. As a result of problems in Chilean fish farms, the availability of salmon in the world market is estimated to be 10-15 % less on current year. On the other hand, PRFoods sees the current market situation as a beneficial possibility while the second main product of the Group fish breeding, the rainbow trout, has turned out to be more competitive. Rainbow trout is cheaper than salmon and as the salmon grows more expensive the clients will buy cheaper alternatives, including the rainbow trout.

UNAUDITED FINANCIAL RESULTS OF AS PRFOODS, THE 1ST QUARTER OF 2016 COMPARED TO THE 1ST QUARTER OF 2015

  • Unaudited consolidated revenue 10.2 million euros, decrease -0.06 million euros, i.e. -0.6%. 
  • Gross margin 9.5%, decrease -2.6 percentage points.
  • Negative impact from revaluation of biological assets -0.4 million euros (1st quarter 2015: negative impact of -1.0 million euros).
  • EBITDA from operations 0.2 million euros, decrease -0.2 million euros, i.e. -47.6%.
  • EBITDA -0.2 million euros, improvement 0.4 million euros, i.e. 63.2%.
  • The operating loss -0.5 million euros, improvement 0.4 million euros, i.e. 39.8%.
  • Net loss -0.5 million euros, improvement 0.08 million euros, i.e. 13.9%.