PRF: Consolidated Unaudited Interim Report of AS PRFoods for 3rd quarter of 2018 and 3 months of 2018/2019 financial year

Management commentary

We remind you that since we changed our financial year, the last financial year was extended to 18 months. The financial year that began on 01.07.2018 is of standard length and ends 30.06.2019. In the report, the comparable data from the 3 quarter of 2017 is used.

The Q3 results of PRFoods indicate that the chosen strategy is bearing fruit. We took the direction to margin improvement and discontinuing activities in lower margin sectors and this has started to manifest itself in results. Gross profit growth by 21% is very positive. We have also increased our own brand's share in retail, including in Estonia. The UK sales have been impacted by a very volatile UK Sterling since Brexit vote. Q3 operating results and EBITDA was impacted by one-time bonuses paid for previous financial year, that temporarily hiked our labour costs. Considering that the major salary increases in the company took place last year, we do not see any short-term pressure on wages. We have also started to consolidate parallel functions in the group companies and moving the group's support services to regions with more optimal costs. 

New investments programme is on track and from 2019 we are moving to only using environmentally sustainable packaging, starting from Estonia first.

Biomass revaluation was significantly lower compared to same period last year. There are mainly two reasons for that, we started the season with lower biomass volume and the biomass growth in the beginning of the season was slower, but at the same time better weather in Q3 allowed for additional growth and we delayed most of harvesting until November. Hence the biomass revaluation was transferred to Q4. 

3 months consolidated results are as follows:

Q4 forecast meets the management's expectations and the management remains positive about the outlook and improved profitability. 

Quarterly presentation will be published on our website latest at 7  of December.

KEY RATIOS

Consolidated statement of financial position

Consolidated statement of profit or loss and other comprehensive income

Indrek Kasela
AS PRFoods
Member of the Management Board
Phone: +372 452 1470
investor@prfoods.ee
www.prfoods.ee

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