PRF: AS PRFoods’ unaudited preliminary consolidated turnover of the 4th quarter and 12 months of the 2019/2020 financial year

PRFoods’ unaudited preliminary consolidated turnover in 4^th quarter of the fiscal year 2019/2020 amounted to EUR 15.11 million euros, decreased by 29.5% compared to the same period a year ago (4Q 2018/2019: 21.42 million euros). The preliminary turnover of the first 12 months of the financial year was 78.34 million euros (12m 2018/2019: 85.61 million euros).

• The Q4 decline in sales was 29.5%; including sales increase in retail sector by 7.3%, sales decrease in HoReCa sector by 65.0% and in wholesale sector by 49.6% (partly also influenced by HoReCa sector) compared to the same period previous year;

• The 12-months sales decrease compared the same period a year ago was 8.5%, mainly affected by lower sales figure in the 4^th quarter. During 2019/2020 the product portfolio experienced a change where raw fish and fillets’ segment increased by 4 pp and smoked products declined accordingly.

Indrek Kasela, CEO, PRFoods :

„Last quarter was defined by the fact that most countries took drastic measures to combat COVID-19 pandemic. PRFoods’ main markets, Finland and UK, closed 100% HoReCa markets, except for takeaways. Similarly, passenger ferries, air transport and hotels were closed, which has been important sector in our sales. Finland and UK have opened restaurants in June and July respectively, albeit with restrictions. In Baltic States, including Estonia, HoReCa sector has recovered rapidly and spread of virus has been contained. Already in June we saw most of our markets becoming more lively, also prices recovered. HoReCa was closed also in many other countries in Europe and Asia, where we export our products. We saw increased sales in retail and people shopped more.

COVID-19 made salmon and trout prices very volatile, which decreased ca 30% over the same periood last year. Primarly it impacted sales and prices  of fresh fish, but at the same time we saw no negative impact on demand. Quite the opposite, we have increased our market share in retai chains in fresh fish whole sale. On positive side, we can mention that despite of drastic drop in fish prices, we have managed to maintain price levels, including in smoked products, compared to last year. In recognition of PRFoods, all our factories were functioning during the crisis. Also we managed to increase our volumes in retail, particularly in Baltic States both in fresh fish and smoked products. We must take into account that according to OECD, the decline in tourism sector will be 45-70% due to COVID-19 and we cannot assume full recovery of HoReCa in 2020/21. PRFoods took already earlier direction to increase sales in retail chains, also in fresh fish sales to retail and in market share. We also seeing consolidation of market share to stronger players.

PRFoods has been receiving COVID-19 subsidies mostly related to labour. We have also reduced our cost base. We must thank governments of Estonia, Finland and UK for developing rapid support mechanisms for industries. Considering that food production is of strategic importance, we have prepared for next wave of pandemic. In case COVID-19 new waves will not be as drastic in Europe and Asia, we can be optimistic about next financial year. Bigger investments, including automatization of factories, are underway and we are launching several new products for retail markets for Europe and elsewhere. Brexit in UK has given certain advantages to local producers, incl John Ross Jr. and already today we can see some positive impact, incl on profitability , as domestic retail chains prefer local producers for supply security. We see increased competition in Finland, as due to fall in exports, lots of local producers are refocussing on domestic market. Our strength and advantage is our fish farming, that give us competitive edge over other processors. We have put lot of focus on development of fish farming in Estonia, where it can be strategically important sector on state level.“

In the 4^th quarter of the financial year sales in both fresh fish and smoked fish product groups declined. Total turnover of raw fish and fillets product group in the financial year remained at level of the previous financial year and accounted for 46% of the total product portfolio (12m 2018/2019: 42%). The turnover of smoked products decreased by 18.4%, resulting in the product group’s share of the total portfolio decreasing to 38% (12m 2018/2019: 43%).

By customer groups, the sales growth of retail chains in the 4^th quarter was 7.3%, and in the HoReCa and wholesale sectors the sales decreased by 65.0% and 49.6%, respectively. During the financial year, the largest decrease in turnover was in the HoReCa sector – 16.1%.

The three largest markets had an aggregated turnover of 12.74 million euros accounting for 84.3% of total sales in the 4^th quarter of the financial year compared to the sales of 19,22 million euros and the share of 89.7% in the same period a year ago. Notably have increased sales to Latvia.

Indrek Kasela

AS PRFoods

Member of the Management Board

Phone: