PRFoods Audited Consolidated Annual Report 2020/2021
15 Noviembre 2021 - 9:02AM
PRFoods Audited Consolidated Annual Report 2020/2021
Management Commentary
The most difficult year in group history is
over. We were attacked from three fronts: from one side the corona
crisis caused a situation, where demand for fish products and raw
material prices were dropping drastically. This led to decrease in
gross margin and revenue. Secondly, we were entering into the
crisis with high financial leverage due to recent acquisitions of
companies and banks demanded aggressively us to reduce loan
portfolio. Third, group previous management of Finland was not able
and didn’t want to react to changes, which meant that problems were
accumulating in that unit. Dealing with all three crisis at the
same time was increasing group loss – we were forced to make
decisions, which would not normally have been done.
As a result of above, group’s turnover decreased
yearly bases 25% to 58.7 million euros(2019/2020: 78.3 million
euros).
EBITDA loss 1.3 million euros was the final
result – historically first one for us (2019/2020: EBITDA profit
1.9 million euros). Net loss 5.2 million euros (2019/2020: net loss
1.9 million euros).
EBITDA was significantly impacted: raw material
prices increased abruptly when corona restrictions were loosened,
but at the same time Finnish market sales prices were agreed during
winter, when prices were lower. This led to the situation in last
quarter, where we were forced to sell some products below COGS. To
end this we had to release the local CEO and informed customers
about ending non-profitable contracts.
From positive side the group’s cash flow from
operations was positive by 2 million euros and total cashflow over
the period improved by 0.53 million euros. We also reduced our net
debt and reduced significantly short term liabilities of the
company. Our fish farming unit presented better results and was a
backbone of the Scandinavian business. In that field we miss
permission from Estonian government to begin with large-scale
fish-farming – due to that we missed significant revenue.
Although our Scotland units net profit and
turnover decreased up to 30%, John Ross Jr managed to end the year
with 1.4 million euros EBITDA. This was outstanding as well as
Estonian unit, who managed to rise from month to month retail
product sales despite HoReCa markets decrease close to zero.
The number of employees decreased by ca 10% on
annual basis. Finland’s units cost decrease didn’t match the
decrease of revenue and margins. In conclusion we can say that
Finnish unit was the root cause of problems.
PRFoodsi action plan to overcome the crisis
is:
- Decrease overall debt level through positiive EBITDA and
strengthening of equity base.
- Completely restructure Finnish division, either through
disposal or closure of loss-making business units. Eliminate
totally all low margin products form Finnish sales.
- Increase reeteil sales in UK, EU markets, including home market
Estonia.
- Group’strategic focus is on fish farming, as a division that
has been profitable every year. Target is to reach by 2023 fish
farming volume of 10,000 tons, giving additional 45-50 million
euros in sales by year.
Group’s financial position is not simple. At the
same time, we must remember that 11 million euros bonds have been
issued solely for refinancing of John Ross Jr. acquisition and John
Ross Jr results have not been impacted so severly, their
operational cash flow is strong and they pay regularly dividends to
parent company, therefore we find their leverage to be acceptable.
Fish farming requires long term capital for fish feed and this is
in process.
Last year we were forced to reduce significantly
working capital financing through banks, which put strain on
company’s finances. We have reduced significantly working capital
needs in operations, also through lower inventory. Most important
is to restore profitability in the environment of lower sales and
restructure loss-making business units.
Having hardened for second year in corona
crisis, we know that it is not sustainable to rely on outside help
and all difficult decisions need to be taken sooner than later. For
our advantage the fish market has started much stronger this year
and is more predictable, the demand for our products is growing.
The only objective of new financial year is profit and everything
that blocks our road to profitabilty must be eliminated.
Key Ratios of the GrouP
INCOME STATEMENTmln EUR |
2020/2021 |
2019/2020 |
2018/ 2019 |
2017/2018 |
2016/2017 |
Sales |
58.7 |
78.3 |
85.7 |
94.9 |
51.1 |
Gross profit |
5.0 |
9.6 |
11.9 |
13.2 |
3.9 |
EBITDA from operations* |
-1.2 |
2.8 |
4.0 |
6.0 |
0.6 |
EBITDA |
-1.3 |
1.9 |
1.7 |
4.4 |
2.0 |
EBIT |
-3.9 |
-0.7 |
-0.5 |
2.3 |
0.7 |
EBT |
-5.0 |
-1.8 |
-1.2 |
1.4 |
0.5 |
Net profit (-loss) |
-5.2 |
-1.9 |
-1.5 |
1.0 |
0.2 |
Gross margin |
8.5% |
12.2% |
13.9% |
13.9% |
7.7% |
Operational EBITDA margin |
-2.1% |
3.5% |
4.7% |
6.3% |
1.2% |
EBITDA margin |
-2.1% |
2.4% |
2.0% |
4.7% |
3.8% |
EBIT margin |
-6.6% |
-0.9% |
-0.5% |
2.5% |
1.4% |
EBT margin |
-8.5% |
-2.2% |
-1.4% |
1.5% |
1.1% |
Net margin |
-8.8% |
-2.4% |
-1.7% |
1.1% |
0.4% |
Operating expense
ratio |
16.1% |
13.4% |
12.5% |
10.5% |
9.6% |
|
|
|
|
|
|
BALANCE
SHEETmln EUR |
30.06.2021 |
30.06.2020 |
30.06.2019 |
30.06.2018 |
30.06.2017 |
Net debt |
22.4 |
20.7 |
20.5 |
18.1 |
1.0 |
Equity |
15.8 |
19.8 |
21.9 |
23.3 |
22.7 |
Working capital |
-3.2 |
-4.0 |
-3.1 |
2.8 |
11.5 |
Assets |
55.6 |
57.1 |
62.5 |
65.5 |
33.5 |
Liquidity ratio |
0.8x |
0.8x |
0.9x |
1.1x |
2.3x |
Equity ratio |
28.4% |
34.7% |
35.0% |
35.6% |
67.8% |
Gearing ratio |
58.7% |
51.1% |
48.3% |
43.7% |
4.1% |
Debt to Asset |
0.7x |
0.7x |
0.7x |
0.6x |
0.3x |
Net debt-to-EBITDA from operations |
-17.9x |
7.5x |
5.1x |
3.0x |
1.6x |
ROE |
-29.0% |
-9.1% |
-6.5% |
4.3% |
0.9% |
ROA |
-9.2% |
-3.2% |
-2.3% |
2.0% |
0.6% |
* before one-offs and fair value adjustment of fish stock
Indrek Kasela AS PRFoods Member of the Management
Board Phone: +372 452 1470 investor@prfoods.ee www.prfoods.ee
- PRF_annual report_2020_2021 (eng)
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