Consolidated Unaudited Interim Report of AS PRFoods for the 4th quarter and 12 months of 2022/2023 financial year
First year as fully transformed company has ended with moderate success. PRFoods regained profitability despite significantly lower revenues. Q4 revenues were less by 25% and full year by 53%, since we no longer have our Swedish or Finnish operations. Center of our operations is now UK and Estonian fish processing and farming.
We ended full year with 19,6 million Euro sales compared to 42,1 million last year, but more importantly, our previous year -1,6 million EBITDA loss was replaced with 0,3 million Euro profit, 118,75% improvement.
PRFoods first net profit in many years was 350,000 Euros (last year - 8,2 million loss). Two out of three of our operations: fish farming, Estonian processing and UK and fish farming were profitable. Estonian processing unit posted loss.
Our result could have been even better, but our exclusive seller in Finland decided to end the co-operation in May. While in short term it causes pain, in long term this will benefit us handsomely, since from 2024 we no longer are prohibited by non-competition in Finland, can sell directly to retailers and hope to regain several million Euros in sales already in 2024. High food prices in Estonia and governments plan to raise VAT will dampen demand in Estonia, rise inflation and also affect the competitiveness of Estonian industries. It is a challenge, but with new management in helm at Estonia, I am fully confident that Estonian processing operations will also be profitable next year.
I am extremely pleased that our UK business reached over 1 million Euros Ebitda again, after COVID crisis and now inflationary pressures. John Ross Jr continues to be best Scottish smoked salmon brand and the management has excelled again.
I am also very pleased to announce that our new fish farming licence application in Estonia has been approved and we expect to get the water usage permit in September 2023, meaning we can scale up our fish farming production already from 2024.
Q1 of current year is tough still for Estonia, UK forecast is promising and we expect historically best result from fish farming unit. Cashflow management remains a challenge. Unfortunately we were forced to sell off our profitable Swedish unit to fully repay group level bank loan, this unit could have helped us to regain profitability much faster at much higher level. Leverage is still too high for regained profitability and additional support from shareholders is needed.
We live in interesting times, and one challenge is replaced by another for most of the industries that are not protected or subsidised by government.
KEY RATIOS
INCOME STATEMENT
| mln EUR (unless indicated otherwise) | 4Q 2022/2023 | 12 mos 2021/2022 | 4Q 2021/2022 | 12 mos 2020/2021 |
| Sales | 4,0 | 19,6 | 5,3 | 42,1 |
| Gross profit | 0,4 | 3,6 | 0,5 | 3,1 |
| EBITDA from operations | 0,1 | 0,3 | 0,4 | -1,2 |
| EBITDA | 0,1 | 0,3 | -0,3 | -1,6 |
| EBIT | -0,3 | -1,0 | -1,1 | -4,2 |
| EBT | -0,5 | 0,4 | -1,5 | -8,2 |
| Net profit (loss) | -0,5 | 0,35 | -1,5 | -8,2 |
| Gross margin | 9,9% | 18,3% | 10,0% | 7,4% |
| Operational EBITDA margin | 2,3% | 1,6% | 7,6% | -2,8% |
| EBITDA margin | 2,3% | 1,6% | -6,3% | -3,7% |
| EBIT margin | -7,6% | -5,0% | -21,3% | -9,9% |
| EBT margin | -12,7% | 2,2% | -28,7% | -19,5% |
| Net margin | -12,3% | 1,8% | -29,0% | -19,4% |
| Operating expense ratio | -21,3% | -24,0% | -25,8% | -17,1% |
BALANCE SHEET
| mln EUR unless indicated otherwise | 30.06.2023 | 30.06.2022 | 30.06.2021 |
| Net debt | 16,9 | 24,7 | 22,4 |
| Equity | 7,5 | 8,1 | 15,8 |
| Working capital | 0,3 | -3,2 | -3,2 |
| Assets | 29,9 | 38,9 | 55,6 |
| Liquidity ratio | 1,1x | 0,7x | 0,8x |
| Equity ratio | 25,1% | 20,7% | 28,4% |
| Gearing ratio | 69,2% | 75,4% | 58,7% |
| Debt to total assets | 0,7x | 0,8x | 0,7x |
| Net debt to operating EBITDA | 54,9x | -14,5x | -17,9x |
| ROE | 4,4% | -68,5% | -29,0% |
| ROA | 1,0% | -17,3% | -9,2% |
Consolidated Statement of Financial Position
| EUR '000 | 30.06.2023 | 30.06.2022 |
| ASSETS | ||
| Cash and cash equivalents | 394 | 110 |
| Receivables and prepayments | 2 168 | 2 567 |
| Inventories | 1 861 | 2 196 |
| Biological assets | 772 | 3 003 |
| Total current assets | 5 195 | 7 876 |
| Deferred tax assets | - | 93 |
| Long-term financial investments | 381 | 229 |
| Tangible assets | 6 563 | 8 882 |
| Intangible assets | 17 718 | 21 837 |
| Total non-current assets | 24 662 | 31 041 |
| TOTAL ASSETS | 29 857 | 38 917 |
| EQUITY AND LIABILITIES | ||
| Interest-bearing liabilities | 1 793 | 7 094 |
| Payables and prepayments | 3 127 | 3 978 |
| Total current liabilities | 4 919 | 11 073 |
| Interest-bearing liabilities | 15 461 | 17 725 |
| Payables and prepayments | - | 204 |
| Deferred tax liabilities | 1 664 | 1 599 |
| Government grants | 318 | 265 |
| Total non-current liabilities | 17 442 | 19 792 |
| TOTAL LIABILITIES | 22 361 | 30 865 |
| Share capital | 7 737 | 7 737 |
| Share premium | 14 007 | 14 007 |
| Treasury shares | - 390 | - 390 |
| Statutory capital reserve | 51 | 51 |
| Currency translation differences | 549 | 839 |
| Retained profit (loss) | -14 719 | - 14 391 |
| Equity attributable to parent | 7 236 | 7 853 |
| Non-controlling interest | 259 | 199 |
| TOTAL EQUITY | 7 495 | 8 052 |
| TOTAL EQUITY AND LIABILITIES | 29 857 | 38 917 |
Consolidated Statement of Profit or Loss And Other Comprehensive Income
| EUR '000 | 4Q 2022/2023 | 4Q 2021/2022 | 12m 2022/2023 | 12m 2021/2022 |
| Revenue | 3 993 | 5 250 | 19 578 | 42 128 |
| Cost of goods sold | -3 599 | -4 723 | -16 003 | -38 993 |
| Gross profit | 394 | 528 | 3 575 | 3 136 |
| Operating expenses | -851 | -1 354 | -4 706 | -7 207 |
| Selling and distribution expenses | -755 | -630 | -2 691 | -4 843 |
| Administrative expenses | -96 | -724 | -2 015 | -2 364 |
| Other income / expense | 152 | 443 | 150 | 307 |
| Fair value adjustment on biological assets | 0 | -734 | 0 | -420 |
| Operating profit (loss) | -305 | -1 117 | -982 | -4 184 |
| Financial income / expenses | -203 | -388 | 1 416 | 4 039 |
| Profit (Loss) before tax | -508 | -1 505 | 434 | -8 223 |
| Income tax | 19 | -20 | 87 | 63 |
| Net profit (loss) for the period | -489 | -1 525 | 347 | -8 160 |
| Net profit (loss) attributable to: | ||||
| Owners of the Parent Company | -503 | -1 502 | 319 | -8 143 |
| Non-controlling interests | 13 | -23 | 28 | -17 |
| Total net profit (loss) for the period | -489 | -1 525 | 347 | -8 160 |
| Other comprehensive income (loss) that may subsequently be classified to profit or loss: | ||||
| Foreign currency translation differences | 288 | 148 | -290 | 280 |
| Total comprehensive income (expense) | -201 | -1 377 | 57 | -7 880 |
| Total comprehensive income (expense) attributable to: | ||||
| Owners of the Parent Company | -215 | -1 354 | 29 | -7 863 |
| Non-controlling interests | 13 | -23 | 28 | -17 |
| Total comprehensive income (expense) for the period | -201 | -1 377 | 57 | -7 880 |
| Profit (Loss) per share (EUR) | -0,01 | -0,04 | 0,01 | -0,21 |
| Diluted profit (loss) per share (EUR) | -0,01 | -0,03 | 0,01 | -0,21 |
Indrek Kasela
AS PRFoods
Member of the Management Board
Phone:+372 452 1470
investor@prfoods.ee
www.prfoods.ee
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