Consolidated Unaudited Interim Report of AS PRFoods for the 2nd quarter and 6 months of 2022/2023 financial year
MANAGEMENT COMMENTARY
2022/23 financial year that started in July 2022 and represents very different group structure. Due to high leverage and losses, we divested from loss-making Finnish operations in 2022 and sold for profit our Swedish operations.
New group structure has fish processing business in Scotland and Saaremaa, Estonia, and farming operations in Estonia.
The Q2 and H1 sales were 7.3 and 11.9 million euros respectively, naturally less due to offload of Finnish operations, both processing and fish farming (15.3 million in Q2 last year and 29.5 million eur in H1). Better focus on Value Added Product sales and fresh fish sales from our farms, marked very sharp turnaround in profit.
First time in post-covid environment all our operational subsidiaries (Saare Kala Tootmine, Redstorm, JRJ) showed positive EBITDA and were profitable in Q2.
On consolidated basis our results improved drastically in Q2, both on year on year basis and quarter over quarter: EBITDA was 800,000 eur vs -300,000 eur in Q2 2021, improvement of over 360%. On net profit level our results improved by 1,3 million eur: net loss for period was -0.1 meur vs -1,4 meur last year. Our financial expenses decreased by 50% due to leverage. It is important to note that nearly 90% of Group's debt liabilities carry fixed interest (bonds and loans).
Operating profit increased by 120% and was 0.2 meur vs -1,2 meur last year.
PRFoods Net Debt is still very high, but we managed to improve our liquidity ratio back to 1.0. Despite volatility in food markets and high inflation environment, we see continued demand for our products and ability to transfer input price increases to product prices.
On 6 months basis, our consolidated net profit was 733,000 eur vs -2,12 million loss last year. Net profit includes one-off profit from sale of Swedish subsidiary.
While being more concentrated in our size, we are more focused on performance, and we believe we can achieve sustainable EBITDA profitability in our processing business. Fish Farming is seasonal operation still and next harvest season will after end of current financial year.
It has been tough road negotiating COVID, high inflation, war and breakdown of international logistics, but we have managed. Necessary product changes and management changes were completed, and new team is very ambitious and focussed on profitability. Enormous thank you goes out to all our employees who have shown commitment and resilience!
KEY RATIOS
INCOME STATEMENT
| mln EUR unless indicated otherwise | 2Q 2022/2023 | 2021/2022 | 2Q 2021/2022 | 2020/2021 |
| Sales | 7,3 | 42,1 | 15,3 | 58,7 |
| Gross profit | 1,6 | 3,1 | 2,2 | 5 |
| EBITDA from operations | 0,8 | -1,7 | 0,8 | -1,2 |
| EBITDA | 0,8 | -2,1 | -0,3 | -1,3 |
| EBIT | 0,2 | -4,2 | -1 | -3,9 |
| EBT | -0,0 | -8,2 | -1,4 | -5 |
| Net profit (loss) | -0,1 | -8,2 | -1,4 | -5,2 |
| Gross margin | 22,1% | 7,4% | 14,1% | 8,50% |
| Operational EBITDA margin | 11,3% | -4,1% | 5,2% | -2,1% |
| EBITDA margin | 11,3% | -5,1% | -2,1% | -2,1% |
| EBIT margin | 2,9% | -9,9% | -6,4% | -6,6% |
| EBT margin | -0,5% | -19,5% | -8,9% | -8,5% |
| Net margin | -1,8% | -19,4% | -9,1% | -8,8% |
| Operating expense ratio | -18,9% | -17,1% | 15,1% | 16,1% |
BALANCE SHEET
| mln EUR unless indicated otherwise | 31.12.2022 | 30.06.2022 | 31.12.2021 | 30.06.2021 |
| Net debt | 17,7 | 24,7 | 24,2 | 20,9 |
| Equity | 7,5 | 8,1 | 14,9 | 15,8 |
| Working capital | 0,0 | -3,2 | -2,6 | -2,9 |
| Assets | 32,2 | 38,9 | 56,0 | 55,3 |
| Liquidity ratio | 1,0x | 0,7x | 0,9x | 0,9x |
| Equity ratio | 23,3% | 20,7% | 26,7% | 28,6% |
| Gearing ratio | 70,2% | 75,4% | 61,8% | 56,9% |
| Debt to total assets | 0,8x | 0,8x | 0,7x | 0,7x |
| Net debt to operating EBITDA | 21,4x | -14,5x | -14,3x | -16,9x |
| ROE | -1,7% | -68,5% | -26,7% | -28,7% |
| ROA | -0,4% | -17,3% | -7,9% | -9,1% |
Consolidated Statement of Financial Position
| EUR '000 | 31.12.2022 | 31.12.2021 | 30.06.2022 |
| ASSETS | |||
| Cash and cash equivalents | 386 | 498 | 110 |
| Receivables and prepayments | 5 016 | 4 463 | 2 567 |
| Inventories | 2 089 | 4 596 | 2 196 |
| Biological assets | 0 | 4 523 | 3 003 |
| Total current assets | 7 491 | 14 080 | 7 876 |
| Deferred tax assets | 0 | 38 | 93 |
| Long-term financial investments | 304 | 300 | 229 |
| Tangible assets | 6 944 | 14 655 | 8 882 |
| Intangible assets | 17 443 | 23 715 | 21 837 |
| Total non-current assets | 24 691 | 38 708 | 31 041 |
| TOTAL ASSETS | 32 182 | 52 788 | 38 917 |
| EQUITY AND LIABILITIES | |||
| Interest-bearing liabilities | 2 777 | 6 275 | 7 094 |
| Payables and prepayments | 4 672 | 11 666 | 3 978 |
| Government grants | 0 | 207 | 0 |
| Total current liabilities | 7 449 | 18 148 | 11 072 |
| Interest-bearing liabilities | 15 270 | 18 180 | 17 725 |
| Payables and prepayments | 0 | 0 | 204 |
| Deferred tax liabilities | 1 644 | 1 877 | 1 599 |
| Government grants | 327 | 662 | 265 |
| Total non-current liabilities | 17 241 | 20 719 | 19 792 |
| TOTAL LIABILITIES | 24 690 | 38 867 | 30 865 |
| Share capital | 7 737 | 7 737 | 7 737 |
| Share premium | 14 007 | 14 007 | 14 007 |
| Treasury shares | - 390 | -390 | -390 |
| Statutory capital reserve | 51 | 51 | 51 |
| Currency translation differences | 394 | 831 | 839 |
| Retained profit (loss) | -14 605 | -8 883 | -14 391 |
| Equity attributable to parent | 7 194 | 13 353 | 7 853 |
| Non-controlling interest | 297 | 568 | 199 |
| TOTAL EQUITY | 7 491 | 13 921 | 8 052 |
| TOTAL EQUITY AND LIABILITIES | 32 182 | 52 788 | 38 917 |
Consolidated Statement of Profit or Loss And Other Comprehensive Income
| EUR '000 | 2Q 2022/2023 | 2Q 2021/2022 | 6m 2022/2023 | 6m 2021/2022 |
| Revenue | 7,300 | 15,292 | 11,910 | 29,499 |
| Cost of goods sold | -5,688 | -13,139 | -9,785 | -26,572 |
| Gross profit | 1,612 | 2,153 | 2,125 | 2,927 |
| Operating expenses | -1,379 | -2,395 | -2,493 | -4,704 |
| Selling and distribution expenses | -671 | -1,668 | -1,314 | -3,249 |
| Administrative expenses | -708 | -727 | -1,179 | -1,455 |
| Other income / expense | -21 | 11 | -68 | 62 |
| Fair value adjustment on biological assets | 0 | -752 | -170 | 68 |
| Operating profit (loss) | 212 | -983 | -606 | -1,647 |
| Financial income / expenses | -245 | -384 | 1,447 | -368 |
| Profit (Loss) before tax | -33 | -1,367 | 841 | -2,015 |
| Income tax | -102 | -17 | -108 | -109 |
| Net profit (loss) for the period | -135 | -1,384 | 733 | -2,124 |
| Net profit (loss) attributable to: | ||||
| Owners of the Parent Company | -210 | -1,242 | 668 | -2,160 |
| Non-controlling interests | 75 | -142 | 66 | 36 |
| Total net profit (loss) for the period | -135 | -1,384 | 733 | -2,124 |
| Other comprehensive income (loss) that may subsequently be classified to profit or loss: | ||||
| Foreign currency translation differences | 0 | 384 | -445 | 272 |
| Total comprehensive income (expense) | -135 | -1,000 | 288 | -1,852 |
| Total comprehensive income (expense) attributable to: | ||||
| Owners of the Parent Company | -210 | -858 | 223 | -1,888 |
| Non-controlling interests | 75 | -142 | 66 | 36 |
| Total comprehensive income (expense) for the period | -135 | -1,000 | 288 | -1,852 |
| Profit (Loss) per share (EUR) | -0.01 | -0.03 | 0.02 | -0.06 |
| Diluted profit (loss) per share (EUR) | 0.00 | -0.03 | 0.01 | -0.05 |
Indrek Kasela
AS PRFoods
Member of the Management Board
Phone:+372 452 1470
investor@prfoods.ee
www.prfoods.ee
