Consolidated Unaudited Interim Report of AS PRFoods for the 3nd quarter and 9 months of 2020/2021 financial year

MANAGEMENT COMMENTARY

The most difficult year in PRFoods history is coming to close. Second wave of corona crisis lasted longer than predicted and in reality we have operated under restrictions the entire financial year ending in June. HoReCa has been closed, export logistics has been hindered and Norwegian salmon farmers dumped salmon at record low prices, that led to decrease of entire market. All this is reflected in our financial performance.

Unfortunately we must admit that previous management made mistakes in investments and did not react to changed environment fast enough in Finland, thus amplifying the negatiive effect of corona. UK operations have been consistently profitable and from the beginning of calendar year we have resumed pre-coroan profitability and we see strong growth in sales and profitability for next financial year. Estonian operations are still small, but at the samet ime we doubled our retail sales on y-o-y. Fresh salmon trading, characterised by high sales volatility , but small margins, has been in very substantial decline due to corona and record low prices.

On positive side we managed to end Q3 with same result as last year despite -23% in sales, considering that January-March 2020 were normal months, but January-March 2021, Europe was still thick in corona crisis.

At the same time it has been one of the most positive years for us, as we got much closer in our strategy to become one of the biggest fish farmers in the region. New farming permits in Sweden and potential new permits in Estonia could contribute to 30-50 million euros additional sales in coming years.

We are prepared that there will be new corona-related restrictions in fall 2021.

We also deal actively with deleveraging the company, carrying out new issue of convertible bonds. Ca half of our loans are related to acquisition finance of John Ross Jr. , and their results have not been materially affected by corona, meaning the leverage is acceptable. Fish farming requires long-term financing and we are investigating alternatives. We have reduced the need of working capital in processing, decreasing our inventory levels. Most important is to restore profitability in the environment of decreased sales.

KEY RATIOS

INCOME STATEMENT 

mln EUR	1Q 2021	4Q 2020	3Q 2020	2Q 2020	1Q 2020	4Q 2019	3Q 2019	2Q 2019
Sales	14.2	17.0	12.7	15.1	18.5	25.4	19.3	21.5
Gross profit	0.9	2.5	1.2	0.7	2.0	4.3	2.6	2.1
EBITDA from operations	-0.5	0.6	-0.3	-0.4	0.0	2.1	0.7	0.3
EBITDA	-0.7	0.7	-0.5	-0.4	-0.9	1.4	1.5	0.3
EBIT	-1.4	0.0	-1.1	-1.0	-1.4	0.7	1.0	-0.3
EBT	-1.8	-0.1	-1.4	-1.2	-1.8	0.6	0.8	-0.4
Net profit (-loss)	-1.8	-0.2	-1.4	-1.3	-1.7	0.5	0.6	-0.6
Gross margin	6.6%	14.9%	9.4%	4.6%	10.8%	17.0%	13.4%	9.8%
Operational EBITDA margin	-3.5%	3.4%	-2.6%	-2.6%	0.1%	8.4%	3.8%	1.4%
EBITDA margin	-5.3%	4.1%	-3.8%	-2.6%	-4.6%	5.3%	7.6%	1.4%
EBIT margin	-9.9%	0.2%	-8.8%	-6.4%	-7.8%	2.9%	5.0%	-1.2%
EBT margin	-12.5%	-0.6%	-11.3%	-8.1%	-9.8%	2.2%	3.9%	-2.0%
Net margin	-12.5%	-1.2%	-11.3%	-8.4%	-9.2%	2.0%	2.9%	-3.0%
Operating expense ratio	15.6%	15.6%	18.2%	13.9%	14.3%	12.5%	13.4%	11.7%

BALANCE SHEET

mln EUR	31.03.2021	31.12.2020	30.09.2020	30.06.2020	31.03.2020	31.12.2019	30.09.2019
Net debt	21.4	21.9	21.5	20.7	17.0	17.8	19.9
Equity	17.6	18.6	18.5	19.8	21.6	23.3	22.8
Working capital	-5.0	-3.9	-4.4	-4.0	-2.5	-3.5	-3.0
Assets	54.5	57.5	57.4	57.1	56.9	60.5	62.4
Liquidity ratio	0.8x	0.8x	0.8x	0.8x	0.9x	0.9x	0.9x
Equity ratio	32.4%	32.4%	32.3%	34.7%	37.9%	38.5%	36.5%
Gearing ratio	54.9%	54.0%	53.7%	51.1%	44.0%	43.3%	46.6%
Debt to total assets	0.7x	0.7x	0.7x	0.7x	0.6x	0.6x	0.6x
Net debt to EBITDA op	-55.3x	160.0x	12.8x	7.5x	5.3x	5.3x	5.4x
ROE	-23.8%	-21.9%	-7.0%	-9.1%	-5.7%	-3.2%	-4.5%
ROA	-8.4%	-7.8%	-2.4%	-3.2%	-2.1%	-1.2%	-1.6%

Consolidated Statement of Financial Position

Thousand euros	31.03.2021	31.03.2020	30.06.2020
ASSETS
Cash and cash equivalents	1,485	3,023	2,276
Receivables and prepayments	3,536	4,095	3,578
Inventories	7,645	9,656	7,884
Biological assets	2,366	2,590	4,249
Total current assets	15,032	19,364	17,987
Deferred income tax	21	18	54
Long-term financial investments	232	215	232
Tangible fixed assets	15,541	14,135	16,179
Intangible assets	23,626	23,208	22,672
Total non-current assets	39,420	37,576	39,137
TOTAL ASSETS	54,452	56,940	57,124
EQUITY AND LIABILITIES
Loans and borrowings	8,984	9,518	10,611
Payables	10,833	12,142	11,132
Government grants	208	187	211
Total current liabilities	20,025	21,847	21,954
Loans and borrowings	13,944	10,489	12,368
Payables	298	190	190
Deferred tax liabilities	1,787	1,854	1,920
Government grants	752	962	873
Total non-current liabilities	16,781	13,495	15,351
TOTAL LIABILITIES	36,806	35,342	37,305
Share capital	7,737	7,737	7,737
Share premium	14,198	14,007	14,007
Treasury shares	-390	-390	-390
Statutory capital reserve	51	51	51
Currency translation reserve	683	147	-366
Retained profit (-loss)	-4,985	-550	-1,654
Equity attributable to parent	17,294	21,002	19,385
Non-controlling interest	352	596	434
TOTAL EQUITY	17,646	21,598	19,819
TOTAL EQUITY AND LIABILITIES	54,452	56,940	57,124

Consolidated Statement of Profit or Loss And Other Comprehensive Income

Thousand euros	3Q 2020/2021	3Q 2019/2020	9 months 2020/2021	9 months 2019/2020
Sales	14,186	18,488	43,952	63,191
Cost of goods sold	-13,247	-16,497	-39,280	-54,293
Gross profit	939	1,991	4,672	8,898
Operating expenses	-2,219	-2,635	-7,204	-8,402
Selling and distribution expenses	-1,523	-1,735	-4,890	-5,673
Administrative expenses	-696	-900	-2,314	-2,729
Other income / expense	26	-35	163	299
Fair value adjustment on biological assets	-154	-754	-130	-530
Operating profit (loss)	-1,408	-1,433	-2,499	265
Financial income/-expenses	-370	-384	-808	-777
Profit (loss) before tax	-1,778	-1,817	-3,307	-512
Income tax	-1	120	-106	-119
Net profit (loss) for the period	-1,779	-1,697	-3,413	-631
Net profit (loss) attributable to:
Owners of the company	-1,739	-1,658	-3,331	-616
Non-controlling interests	-40	-39	-82	-15
Total net profit (loss)	-1,779	-1,697	-3,413	-631
Other omprehensive income (loss) that may subsequently be classified to profit or loss:
Foreign currency translation differences	781	-20	1,049	361
Total comprehensive income (expense)	-998	-1,717	-2,364	-270
Total comprehensive income (expense) attributable to:
Owners of the Company	-958	-1,678	-2,282	-255
Non-controlling interests	-40	-39	-82	-15
Total comprehensive income (expense) for the period	-998	-1,717	-2,364	-270
Profit (loss) per share (EUR)	-0,04	-0,04	-0,09	-0,02
Diluted profit (loss) per share (EUR)	-0,04	-0,04	-0,09	-0,02

Indrek Kasela

AS PRFoods

Member of the Management Board

Phone:+372 452 1470

investor@prfoods.ee

www.prfoods.ee

Attachment

• PRF_interim_9m2020_2021

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