Third Quarter 2006 Results

16.11.2006 - Nutri Pharma (OSE: NUT) today reports operating revenues of NOK 16.9 million and a loss of NOK 4.1 million for the third quarter of 2006.....

Oslo, November 16, 2006

Nutri Pharma (OSE: NUT) today reports operating revenues of NOK 16.9 million and a loss of NOK 4.1 million for the third quarter of 2006. This compares to revenues of NOK 1.4 million and a loss of NOK 1.8 million in the third quarter of 2005. Operating costs in third quarter were NOK 20.8 million compared to NOK 3.0 million in Q3-2005. EBITDA in third quarter shows a deficit of NOK 2.4 million. Amortisation of intangible assets has been charged with NOK 1.5 million in the third quarter (NOK 0.4 million in Q3-2005). Net financial items are recorded with a deficit of TNOK 151 compared to a deficit of TNOK 82 in the same quarter the previous year.

Total revenues decreased by 34% compared to the second quarter's revenues of MNOK 25.7. Out of the total sales of MNOK 16.9 in the third quarter, MNOK 15.8 were recorded in MIG (Russia/CIS) and MNOK 1.1 in the Nordic region.

Nordic region
Royalty income in Q3-06 from the Nordic area increased by 8% compared to second quarter 2005. Total revenues recorded in Q3-05 were NOK 1.4 million of which NOK 1.0 million derived from the Nordic area and 0.4 million from MIG (Russia/CIS) prior to the acquisition of the company. Royalty revenues in the third quarter 2006 were NOK 1.1 million.

A provision of NOK 1.2 million relating to the liquidation process of Nutri Pharma's two Danish subsidiaries has been released. The operating profit from the Nordic region was NOK 1.6 million compared to an operating loss of NOK 1.7 million i Q3-2005. Amortisation of Royalty and Patent rights has been expensed with NOK 0.4 million (Q3-2005: NOK 0.4 million).

Russia/CIS
Compared to second quarter 2006 the revenues in Russia/CIS were reduced by 35%, and both sales of Nutri Pro and cosmetics products were reduced. MIG achieved a gross margin of 87% from sales in Q3, even after a stock provision of MNOK 0.8 million. The business segment Russia/CIS delivered a negative EBITDA of NOK 4.4 million. In Q3-2006 the variable proportion of MIGs costs were 77% of the revenues, covering cost of goods sold, commissions to distributors and service providers. A cost of MNOK 3 million for the annual Premium event in Moscow has been expensed in Q3-06.

As from 1 October 2005 Nutri Pharma operates with two business segments; Nordic, with the existing royalty revenues, and Russia + CIS countries through the direct sales organisation of MIG. For further segment info. see page 8.

Consolidated Income statement (main figures)

 

 

 

INCOME STATEMENT

 

 

 

Q3 2006

Q3 2005

All figures in NOK 1000

9M 2006

9M 2005

FY 2005

 

16 921

1 367

Total revenue

65 142

3 579

25 345

20 876

3 043

Total operating expenses

71 127

13 862

35 088

-3 955

-1 676

Results of operations

-5 985

-10 283

-9 743

-151

-82

Net Financial items

-346

2

132

-4 106

-1 758

Profit/(loss) before taxes

-6 331

-10 281

-9 611

Tax on ordinary results

-4 106

-1 758

Profit/(loss) for the period

-6 331

-10 281

-9 611

-0.05

-0.02

EPS (NOK)

-0.08

-0.14

-0.13

 



 

 

 

BALANCE SHEET

30 Sept 2006

31 Dec 2005

30 Sept 2005

 

Total non-current assets

104 922

105 913

7 292

Total current assets

12 366

14 204

10 700

Total assets

117 288

120 117

17 992

Total equity

36 074

18 712

16 794

Total liabilities

81 214

101 405

1 198

Total equity and liabilities

117 288

120 117

17 992

 



 

 

 

Financial performance January - September 2006
The consolidated loss for the period is MNOK 6.3 (MNOK -10.3), and the EBITDA result shows a loss of MNOK 1.5 (MNOK -9.2). The Nordic operation has achieved an operating profit of MNOK 0.6 and Russia/CIS a deficit of MNOK 6.9 respectively. For segment information see page 8.

Total revenue for the first 9 months is MNOK 65.1 compared to MNOK 3.6 last year which was
royalty revenues from the Nordic area only. Royalty revenue from Nordic is MNOK 3.5 million in 2006. Sales revenue in Russia/CIS is MNOK 61.6 this year (MNOK 0.4). The nutrition products Nutrilett and NutriPro accounts for 64% of total sales revenue in 2006.

Total operating expenses increased from MNOK 13.9 last year (only Nordic) to MNOK 71.1 for the first nine months of 2006. Operating expenses from the Nordic operation are MNOK 4.8 in 2006. Total amortization costs in 2006 are MNOK 4.5, of which MNOK 3.4 relates to the Software platform in MIG and MNOK 1.1 to royalty assets in Nutri Pharma ASA. The comparable amortization costs in 2005 were MNOK 1.1 relating to royalty assets in Nordic.

Net financial expense is TNOK 346, compared to finance revenue of TNOK 2 in the same period of 2005.

Cash and other liquid assets were MNOK 4.2 as of September 30 2006, compared to MNOK 6.6 as of June 30 2006. There has been no further financing activities in this quarter.


Commercial Update
Nordic
Nutrilett, which is distributed through Orkla subsidiary Collett Pharma, as one of their core product lines, continues to show a growing trend. The market segment for nutrition and weight management is increasing in the Nordic market and Nutrilett is the market leader. In Q3-2006 sales from Collett Pharma increased by 17% compared to the Third Quarter of 2005.


Russiaand CIS countries
With revenues of MNOK 15.8 in the Third Quarter, MIG experienced a revenue decrease of 35% compared to the second quarter. The implementation of the new commission plan this autumn has not yet lead to increased sales. However, considerable cost cutting has reduced the break-even to a level where we do not foresee any need for further financing going forward.


Oslo, 16 November 2006
The Board of Directors of Nutri Pharma ASA

For further information:
Trond Syvertsen, CEO +47 23 31 08 80


DOWNLOADS: The complete Q3 2006 Word document can be downloaded from the INVESTOR page.

For more information about Meridian International Group (MIG).

Upcoming financial events

  
Feb 22, 2007  Results 4th quarter 2006
 
 
For further information, please contact
Trond Syvertsen, CEO  +47 23 31 08 80
Haakon Ambjørndalen, CFO +47 23 31 08 89