Overview of the economic activities
Management commentary
We remind you that since we changed our financial year, the last financial year
was extended to 18 months. The financial year that began on 01.07.2018 is of
standard length and ends 30.06.2019. In the report, the comparable data from the
3(rd) quarter of 2017 is used.
The Q3 results of PRFoods indicate that the chosen strategy is bearing fruit. We
took the direction to margin improvement and discontinuing activities in lower
margin sectors and this has started to manifest itself in results. Gross profit
growth by 21% is very positive. We have also increased our own brand's share in
retail, including in Estonia. The UK sales have been impacted by a very volatile
UK Sterling since Brexit vote. Q3 operating results and EBITDA was impacted by
one-time bonuses paid for previous financial year, that temporarily hiked our
labour costs. Considering that the major salary increases in the company took
place last year, we do not see any short-term pressure on wages. We have also
started to consolidate parallel functions in the group companies and moving the
group's support services to regions with more optimal costs.
New investments programme is on track and from 2019 we are moving to only using
environmentally sustainable packaging, starting from Estonia first.
Biomass revaluation was significantly lower compared to same period last year.
There are mainly two reasons for that, we started the season with lower biomass
volume and the biomass growth in the beginning of the season was slower, but at
the same time better weather in Q3 allowed for additional growth and we delayed
most of harvesting until November. Hence the biomass revaluation was transferred
to Q4.
3 months consolidated results are as follows:
* Unaudited consolidated revenue 19.39 million euros, an increase by +1.40
million euros, i.e. +7.8%.
* Gross margin 15.2%, an increase by +1.6 percentage points i.e. +11.9%.
* Positive impact from revaluation of biological assets +0.07 million euros
(3Q 2017: positive impact +1.07 million euros).
* Negative effect of one-offs to the result -0.01 million euros (3Q 2017:
negative influence -0.28 million euros).
* EBITDA from operations +1.06 million euros, a decrease by -0.15 million
euros.
* EBITDA +1.12 million euros, a decrease by -0.88 million euros (without one-
off effects EBITDA +1.13 million euros, a decrease by -1.15 million euros).
* The operating profit +0.57 million euros, a decrease by -0.95 million euros
(without one-off effects operating profit +0.58 million euros, a decrease by
-1.22 million euros).
* Net profit +0.14 million euros, a decrease by -0.97 million euros (without
one-off effects net profit +0.15 million euros, a decrease by -1.23 million
euros).
Q4 forecast meets the management's expectations and the management remains
positive about the outlook and improved profitability.
Quarterly presentation will be published on our website latest at 7(th) of
December.
KEY RATIOS
Income Statement, EUR mln Q3 2018 Q3 2017 18m 2017/2018
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Sales 19.4 18.0 118.5
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Gross profit 3.0 2.5 14.7
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EBITDA from operations 1.1 1.2 5.8
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EBITDA 1.1 2.0 4.2
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EBIT 0.6 1.5 1.5
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EBT 0.4 1.3 0.5
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Net profit (-loss) 0.1 1.1 0.1
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Gross margin 15.2% 13.6% 12.4%
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Operational EBITDA margin 5.4% 6.7% 4.9%
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EBITDA margin 5.8% 11.1% 3.5%
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EBIT margin 3.0% 8.5% 1.3%
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EBT margin 1.8% 7.3% 0.4%
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Net margin 0.7% 6.2% 0.05%
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Operating expense ratio 13.5% 11.1% 10.5%
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Balance Sheet, EUR mln 30.09.2018 30.09.2017 30.06.2018
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Net debt 21.9 16.7 18.1
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Equity 24.1 23.7 23.3
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Working capital 2.0 5.1 2.8
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Assets 64.5 68.0 65.5
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Liquidity ratio 1.1x 1.2x 1.1x
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Equity ratio 37.4% 34.9% 35.6%
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Debt to total assets 47.6% 41.3% 43.7%
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Gearing ratio 0.6x 0.7x 0.6x
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Net debt-to-EBITDA 3.8x 8.0x 3.1x
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ROE 0.1% -1.4% 0.2%
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ROA 0.0% -0.6% 0.1%
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Consolidated statement of financial position
EUR '000 30.09.2018 30.09.2017 30.06.2018
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ASSETS
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Cash and cash equivalents 2,788 6,420 5,960
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Receivables and prepayments 4,219 6,102 4,706
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Inventories 11,782 8,641 12,678
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Biological assets 7,825 10,551 6,498
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Total current assets 26,614 31,714 29,842
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Deferred income tax 26 226 153
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Long-term financial investments 134 102 134
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Tangible fixed assets 14,528 13,562 12,764
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Intangible assets 23,195 22,383 22,604
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Total non-current assets 37,883 36,273 35,655
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TOTAL ASSETS 64,497 67,987 65,497
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EQUITY AND LIABILITIES
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Loans and borrowings 13,242 9,460 12,562
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Payables 11,179 16,831 14,254
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Government grants 242 307 216
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Total current liabilities 24,663 26,598 27,032
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Loans and borrowings 11,480 13,661 11,487
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Payables 519 0 0
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Deferred tax liabilities 2,426 2,843 2,441
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Government grants 1,306 1,156 1,226
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Total non-current liabilities 15,731 17,660 15,154
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TOTAL LIABILITIES 40,394 44,258 42,186
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Share capital 7,737 7,737 7,737
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Share premium 14,007 14,007 14,007
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Treasury shares -390 -390 -390
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Statutory capital reserve 48 48 48
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Currency translation reserve 31 344 7
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Retained profit (-loss) 2,004 1,988 1,904
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Equity attributable to parent 23,437 23,734 23,313
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Non-controlling interest 666 -5 -2
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TOTAL EQUITY 24,103 23,729 23,311
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TOTAL EQUITY AND LIABILITIES 64,497 67,987 65,497
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Consolidated statement of profit or loss and other comprehensive income
EUR '000 Q3 2018 Q3 2017 18m 2017/2018
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Sales 19,393 17,990 118,499
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Cost of goods sold -16,437 -15,539 -103,811
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Gross profit 2,956 2,451 14,688
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Operating expenses -2,623 -1,992 -12,423
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Selling and distribution expenses -1,843 -1,375 -8,841
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Administrative expenses -780 -617 -3,582
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Other income 238 513 1,059
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Other expenses -71 -523 -1,309
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Fair value adjustment on biological assets 73 1,072 -524
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Operating profit (-loss) 573 1,521 1,491
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Financial income 4 1 10
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Financial expenses -226 -209 -1,034
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Profit (-loss) before tax 351 1,313 467
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Income tax -209 -205 -410
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Net profit (-loss) for the period 142 1,108 57
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Net profit (-loss) attributable to:
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Owners of the company 99 1,113 59
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Non-controlling interests 43 -5 -2
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Total net profit (-loss) 142 1,108 57
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Other comprehensive income (-loss) that may
subsequently be classified to profit or loss:
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Foreign currency translation differences 24 -76 -421
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Total comprehensive income (-expense) 166 1,032 -364
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Total comprehensive income (-expense)
attributable to:
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Owners of the Company 123 1,037 -362
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Non-controlling interests 43 -5 -2
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Total comprehensive income (-expense) for the
period 166 1,032 -364
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Profit (-loss) per share (EUR) 0.00 0.03 -0.01
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Diluted profit (-loss) per share (EUR) 0.00 0.03 -0.01
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Indrek Kasela
AS PRFoods
Member of the Management Board
Phone: +372 452 1470
investor@prfoods.ee
www.prfoods.ee
Attachment
* PRF_interim_3m2018_2019 (https://prlibrary-
eu.nasdaq.com/Resource/Download/185e79e1-bbb7-4a69-8558-7ac1aebef220)
|