Published: 2020-02-21 18:00:00 CET
Half Year financial report

PRF: Consolidated Unaudited Interim Report of AS PRFoods for the 2nd quarter and 6 months of 2019/2020 financial year



The first half of this financial year (2HY 2019) was successful for the Company. Despite the decline in sales, we were able to significantly improve overall profitability and capital efficiency.

The Group's consolidated EBITDA for the reporting period was 2.8 million euros, an increase of 48% compared to the same period last year being mainly affected by the revaluation of biological assets. Operating EBITDA (i.e., excluding one-offs and fair value adjustment of fish stock) was 2.9 million euros (2HY 2018: 3.5 million euros). Net profit amounted to 1.1 million euros, almost three times higher than the net profit for the same period last year (2HY 2018: 0.4 million euros).

The second half of 2019 was characterized by a more than 8% decline in salmon and trout market prices, which resulted in Finnish retail chains expecting lower prices for smoked products in the private label segment. To maintain profitability, we decided to reduce the supply of hot and cold smoked products in the Finnish retail market during this period. We were able to partially replace the decline in the turnover of smoked products with sales of fish and fish fillets and other fish products. In the first half of 2020, prices for the private label segment of smoked products are recovering and we will continue with deliveries at the same level as last year.

One of PRFoods' main focuses has been improving cash flow from operating activities, which is reflected in 2HY 2019 positive cash flow from operating activities of 4.5 million euros compared to 2.7 million euros in the same period last year. The Company's net debt was 17.8 million euros as of 31.12.2019 (30.12.2018: 20.0 million euros). The Group's working capital as of 31.12.2019 was -3.5 million euros, the reason being that current liabilities include related party liabilities of 4.2 million euros, which by their nature are long-term but shall be accounted for as short-term due to accounting principles.

We will continue to merge the business activities of Estonian and Finnish companies and create synergies, especially in product development and sales in both domestic and export markets. The legal merger of the Finnish companies Heimon Kala and Trio Trading took place on 31.01.2020, which resulted in the centralization of the companies’ management and key business functions. In Estonia, we have launched a Finnish-Estonian joint brand – Heimon Kala, and for the first time entered the Estonian retail market with rainbow trout farmed in Saaremaa. In the coming years, the priority of product development is to enrich the value of fish farmed in our fish farms.

With regard to fish farming, we have received a positive response from Sweden to expand existing fish farms. In Estonia, we continue increasing the existing farm and applying for new farming licenses. We continue to make the necessary preparations to increase the volume of quality raw material from our fish farms.

The John Ross Jr.'s renewed brand was launched at the end of last quarter and in the coming periods we expect the new brand to generate revenue growth in the UK market.

The Company continues to focus on enhancing environmentally friendly production, including raw materials, energy sources, and packaging.

As signs of threats, we have to highlight the increased competition in the Finnish market which has led to a decline in retail prices compared to the same period last year. The listeria scandal that hit the Estonian fishing industry had a significant impact on the overall retail market, but did not have a significant impact on the total sales of PRFoods as the share of the Estonian market in the Company's total turnover is small.

In the light of the listeria scandal, we can confirm that the PRFoods companies have successfully passed all additional controls and that the Group's production units have international quality management certifications. In addition, our factories are regularly audited by our major counterparties and these audits are performed with near-maximum results. The biggest role here is played by the internal quality management of our companies, including the day-to-day controls in our laboratories, from the purchase of raw materials to the dispatch of the product, and the professionalism of our staff.

The Brexit, which came into effect on 31.01.2020, will have no effect on our UK companies this financial year, however, it is unclear what the long-term impact will be once the transition period ends.

It is also unclear whether and to what extent will the long-term effects of the outbreak of the coronavirus be on commodity exports. Early 2020 saw a decline in demand, and it also made it more difficult to forecast the price of salmon in a situation where deliveries of salmon producers to Asia were hindered.

There are major factory modernizations in Estonia and Finland as well as changes in the product portfolio planned for this calendar year, which may result in short-term sales and profit decrease compared to the previous period.

Taking into account the above and the increased risks of the global economy, PRFoods will forego the estimates of turnover and profit for the current financial year made at the end of the previous financial year. If the Company decides to issue an updated forecast, it will notify accordingly.

On the positive side, we would like to point out that PRFoods successfully completed a non-public bond issue in early 2020, which resulted in short-term liabilities of 9 million euros becoming long-term, releasing thereby short-term cash flows of approximately 2 million euros per year. In the first quarter of 2020, the Company also plans to carry out an additional public issue of bonds.

In order to achieve the goals in the following periods, the Group has strengthened its management in both product development and financials. Our people have worked hard to develop the Company and improve its profitability. PRFoods’ balance sheet, production and customer base are strong, and we look expectantly to the future.

Making big changes is always difficult for employees and I am very grateful that our people are enthusiastically embraced the changes and given their best.



mln EUR4Q 20193Q 20192Q 20191Q 20194Q 20183Q 20182Q 2018
Gross profit4.32,
EBITDA from operations2.10,
Net profit (-loss)0.50,6-0.6-
Gross margin17.0%13,4%9.8%11.7%17.7%15.2%7.9%
Operational EBITDA margin8.4%3,8%1.4%1.1%9.1%5.4%-1.1%
EBITDA margin5.3%7,6%1.4%-2.5%2.9%5.8%1.2%
EBIT margin2.9%5,0%-1.2%-5.6%0.9%3.0%-1.1%
EBT margin2.2%3,9%-2.0%-6.5%0.1%1.8%-2.3%
Net margin2.0%2,9%-3.0%-6.6%0.8%0.7%-5.1%
Operating expense ratio12.5%13,4%11.7%14.1%11.2%13.5%12.0%


mln EUR31.12.201930.09.2019 30.06.201931.03.201931.12.201830.09.201830.06.2018
Net debt17.819,920.518.720.021.918.1
Working capital-3.5-3,0-3.1-
Liquidity ratio0.9x0,9x0.9x0.9x1.0x1.1x1.1x
Equity ratio38.5%36,5%35.0%36.7%37.0%37.4%35.6%
Gearing ratio43.3%46,6%48.3%44.5%45.2%47.6%43.7%
Debt to total assets0.6x0,6x0.7x0.6x0.6x0.6x0.6x
Net debt to EBITDA5.3x5,4x5.1x5.4x5.1x3.8x3.1x

Consolidated Statement of Financial Position

Thousand euros31.12.201931.12.201830.06.2019
Cash and cash equivalents2,6804,9102 583
Receivables and prepayments6,3426,4705 300
Inventories9,10411,55311 980
Biological assets4,3544,7194 924
Total current assets22,48027,65224 787
Deferred income tax664941
Long-term financial investments217134202
Tangible fixed assets14,44414,56914 535
Intangible assets23,28623,04622 969
Total non-current assets38,01337,79837 747
TOTAL ASSETS60,49365,45062 534
Loans and borrowings12,50514,22413 502
Payables13,30112,18414 105
Government grants188241234
Total current liabilities25,99426,64927 841
Loans and borrowings7,94510,7069 540
Deferred tax liabilities2,0702,0942 010
Government grants9811,2571 087
Total non-current liabilities11,18614,57612 827
TOTAL LIABILITIES37,18041,22540 668
Share capital7,7377,7377 737
Share premium14,00714,00714 007
Treasury shares-390-390-390
Statutory capital reserve515151
Currency translation reserve167-70-214
Retained profit (-loss)11082,13066
Equity attributable to parent22,68023,46521 257
Non-controlling interest633760609
TOTAL EQUITY23,31324,22521 866

Consolidated Statement of Profit or Loss And Other Comprehensive Income

Thousand euros2Q 2019/20202Q 2018/20196m 2019/20206m 2018/2019
Sales25,37426,72944,70346 122
Cost of goods sold-21,049-22,011-37,796-38 448
Gross profit4,3254,7186,9077 674
Operating expenses-3,169-2,996-5,767-5 619
  Selling and distribution expenses-2,146-2,084-3,938-3 927
  Administrative expenses-1,023-912-1,829-1 692
Other income / expense206136334303
Fair value adjustment on biological assets-622-1,628224-1 555
Operating profit (loss)7402301,698803
Financial income/-expenses-190-213-393-435
Profit (loss) before tax550171,305368
Income tax-54205-239-4
Net profit (loss) for the period4962221,066364
Net profit (loss) attributable to:    
Owners of the company5291301,042229
Non-controlling interests-339224135
Total net profit (loss)4962221,066364
Other comprehensive income (loss) that may subsequently be classified to profit or loss:    
Foreign currency translation differences66-101381-77
Total comprehensive income (expense)5621211,447287
Total comprehensive income (expense) attributable to:    
Owners of the Company595291,423152
Non-controlling interests-339224135
Total comprehensive income (expense) for the period5621211,447287
Profit (loss) per share (EUR)
Diluted profit (loss) per share (EUR)

Indrek Kasela

 AS PRFoods

 Member of the Management Board

 Phone: +372 452 1470


PRF 6m 2019_2020.pdf