During the first quarter,
Hofseth BioCare continued to implement the company's new strategic
plan and the expansion of the Midsund plant.
Hofseth BioCare ASA had
operating revenues of NOK 5.4 million in the first quarter of 2016,
in line with the first quarter of 2015.
Operating profit (EBIT) was
negative NOK 25.5 million, compared to negative 18.6 million in the
same quarter last year. The figure is influenced by write-downs and
other effects of the strategic change.
Cash flow from operations
was negative NOK 14.4 million, compared to positive 8.8 million in
the corresponding quarter last year. Cash and cash equivalents was
at MNOK 2.9 by the end of the period.
"The quarterly numbers
reflect the turnaround project underway at Hofseth BioCare. The
project is progressing according to plan. We are reducing existing
inventory and preparing for a new start with improved production
lines and higher volumes from July onwards," said Jon Olav Ødegård,
CEO of Hofseth BioCare ASA.
After the end of the first
quarter, Hofseth BioCare completed a private placement of NOK 23.6
million towards existing shareholders and external investors
through issuance of 11.8 million new shares at a subscription price
of NOK 2 per share. A repair issue will be executed after the
annual general meeting.
Also in April, an agreement
was signed with the leading sports retailer XXL for delivery of a
variety of finished products for sale in Norway, Sweden and
Finland. Deliveries to XXL start during the summer of 2016 and will
be in stores immediately thereafter.
The company is currently
expanding its Midsund hydrolysis facility to ramp up production
from July. The rationale for this project is to optimize the
organoleptic properties on ProGo®, significantly lower production
cost on all products and be able to produce and pack PetGo(TM) and
CalGo® in full scale.
Significantly lower production costs will facilitate high-volume
sales to the feed and pet commodity market for improved revenues
and cash flow from the third and fourth quarter. Sales in the feed
market have already started and will in turn reduce storage and
logistics costs.
The project also explores
further changes and add-ons in the sales organization and
management team for stronger sales power and focus on
revenues.
The turnaround project
represents a step change in the company's ability to capitalize on
its world-leading product development and meet the strong demand
for high-quality biomarine ingredients.
Please see HBC's Q1 2016
report attached.
For further information,
please contact:
Jon Olav Ødegård, CEO of Hofseth BioCare ASA
Phone: +47 936 32 966
E-mail: joo@hofsethbiocare.no
About Hofseth
BioCare:
Hofseth BioCare is a Norwegian biotech company that offers
high-value ingredients and finished products for humans and pets.
The company is founded on the core values of sustainability,
traceability and optimal utilization of natural resources. Through
an innovative hydrolysis technology, Hofseth BioCare is able to
preserve the quality of salmon oil, proteins and calcium, prepared
of fresh salmon off-cuts. Hofseth BioCare's objective is to
contribute to the efficient use of marine resources and deliver
quality products for ingredients and finished consumer products in
the nutrition market.
This information is subject
to the disclosure requirements pursuant to section 5-12 of the
Norwegian Securities Trading Act.