Release Date: August 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Record high EBITDA of NOK27 million in Q2 2024, a 40% increase from Q2 2023.
- Gross margin improved to 64%, surpassing the target of 60%.
- Year-to-date revenue increased slightly to NOK210 million from NOK208 million in the previous year.
- Positive impact from product mix, favorable material costs, and good cost control.
- Strategic positioning as a leading global producer of high-quality metformin with an attractive growth potential.
Negative Points
- Revenue in Q2 2024 was NOK106 million, slightly down from NOK107 million in Q2 2023.
- Global metformin prices have decreased over the past 12 months, stabilizing at a low level.
- Unplanned maintenance and repair in Q1 2024 affected production and sales volumes.
- Increased freight lead times and costs due to reduced transportation through the Suez Canal.
- Shift from a net cash position at the end of 2023 to a net debt position of NOK34 million by the end of June 2024.
Q & A Highlights
Q: Will the next dividend be classified as a return of capital?
A: We will communicate the details when relevant, but it is likely to be done in the same manner as previously, which is a repayment of the share premium. (Alexander Karlsen, CFO)
Q: Can you provide details on the cost-saving products for the recycling of water?
A: We had our planned maintenance stop in April and have interfaced the recycling equipment. This will be started up in August/September with a test period during September. We expect savings from that project soon. (Alexander Karlsen, CFO)
Q: What are your plans with the ownership of CF Pharma?
A: We bought 15% of CF Pharma in Hungary, a reputable European API CDMO with a big customer base. We are exploring different strategic options but cannot provide specific details at this time. (Magnus Tolleshaug, CEO)
Q: What are the expected production levels, and when do you expect to reach 7,000 metric tonnes yearly production?
A: We are ramping up production according to sales forecasts. The first half's sales and production volumes were affected by the unplanned stop in Q1, so both would have been higher without it. (Alexander Karlsen, CFO)
Q: Can you elaborate on the strategic options based on CF Pharma?
A: CF Pharma is a well-reputed European CDMO with global sales. We are considering several options, including collaborations or ownership, but we don't have anything concrete to share at this point. (Magnus Tolleshaug, CEO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
