First Quarter 2006 Results

24.05.2006 - Nutri Pharma (OSE: NUT) today reports revenues of MNOK 22.6 million and a loss of MNOK 3.2 million for the first quarter of 2006....

Oslo, May 24, 2006Nutri Pharma (OSE: NUT) today reports revenues of MNOK 22.6 million and a loss of MNOK 3.2 million for the first quarter of 2006. This compares to revenues of MNOK 1.0 and a loss of MNOK 2.6 million in the first quarter of 2005. Out of the total sales of MNOK 22.6 in the first quarter, MNOK 21.6 million were recorded in MIG (Russia/CIS). Royalty revenues of MNOK 1.0 were recorded in the Nordic region, which is the same revenue as in Q1-2005.Russia/CIS
Compared to fourth quarter 2005 the revenues in Russia/CIS grew by 3%. The new product line of cosmetics from the Norwegian company Kilda was launched in Q1-2006, accounting for 45% of revenues in MIG. In total MNOK 2.5 has been expensed in the first quarter relating to events and other marketing efforts launching the new cosmetics line. The loss in MIG in Q1 was MNOK 2.4, including amortisation of the software platform with MNOK 1.1.Nordic region
Royalty income in the Nordic area deriving from the long term licence agreement for Nutrilett was MNOK 1.0 resulting in a loss of MNOK 0.8 in Nutri Pharma ASA.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.







Q1 2006

Q1 2005

All figures in NOK 1000

Q4 2005

FY 2005


22 550

1 031

Total revenue

21 766

23 345

25 641

3 644

Total operating expenses

21 225

35 088

-3 091

-2 613

Results of operations


-9 743



Net Financial items



-3 179

-2 557

Profit/(loss) before taxes


-9 611

Tax on ordinary results

-3 179

-2 557

Profit/(loss) for the period


-9 611











31 Mar 2006

31 Dec 2005

31 Mar 2005


Total non-current assets

102 641

105 913

8 016

Total current assets

12 979

14 204

15 576

Total assets

115 620

120 117

27 136

Total equity

34 443

18 712

22 724

Total liabilities

81 177

101 405


Total equity and liabilities

115 620

120 117

27 136





First Quarter 2006 Results
The consolidated operating loss is MNOK 3.2 in Q1 2006. In the same quarter previous year the loss was MNOK -2.6, which was then based on the Nordic business only.
Nutri Pharma had royalty revenues from the Nordic area of MNOK 1.0 in Q1 2006, compared to MNOK 1.0 in the first quarter the previous year. MIG achieved revenues of MNOK 21.6 through its direct sales organization in Russia and the former CIS countries. Sales of Nutri Pro and Cosmetics each accounted for 45% of the MIG revenues in the first quarter.
Total operating expenses increased from MNOK 3.6 in Q1 2005 to MNOK 25.6 in the first quarter of 2006, with MNOK 2.5 of this total relating to the introduction of the new cosmetics products. Total amortization costs in the first quarter were MNOK 1.5, of which MNOK 1.1 relates to the Software platform in MIG and MNOK 0.4 to royalty assets in Nutri Pharma ASA. The comparable amortization costs in Q1 2005 were MNOK 0.4.
Net financial expense was TNOK 88, compared to finance revenue of TNOK 56 in first quarter of 2005.  
Cash and other liquid assets were MNOK 6.2 as of March 31 2006, compared to MNOK 6.0 as of December 31 2005.
The largest shareholder in Nutri Pharma, Lars Høie has given short term loans to MIG during Q1 2006 in the amount of MNOK 1.7 at an interest rate of 3% p.a.
Nutri Pharma ASA acquired all shares in Meridian International Group Ltd as per 15 September 2005 for a consideration to consist of a maximum of 24 million Nutri Pharma ASA shares. A first installment of the consideration shares consisting of 6 million treasury shares in Nutri Pharma ASA was made at 15 February 2006. The result is a reduction in current liabilities and an equivalent increase in Retained earnings of MNOK 20.7 during Q1 2006.
The balance of the purchase consideration, consisting of a maximum of 18 million new issued Nutri Pharma ASA shares, shall be made in one or more instalments at the latest by 31 March 2007, provided that an independent auditor confirms the agreed valuation of MIG. At 31 March 2006 the liability in the balance sheet towards the sellers of MIG is amounting to MNOK 62.1, resulting from the outstanding balance of 18 million NUT shares due.

Commercial Update

Nutrilett, which is distributed through Collett Pharma as one of their core product lines, is generating royalty revenues of approximately MNOK 1.0. The royalty revenue is expected to be at the same level moving forward.


and CIS countries
The new cosmetics products from Kilda which were launched into the sales network in Q1 are expected to contribute positively to the sales moving forward. Nutri Pro has been well received in the network and a good level of turnover has been established. Both cosmetics and nutrition products achieved sales of around MNOK 10 in Q1-2006. The company is well positioned to benefit from both the economic growth and the increased spending in health and personal care products in the CIS region (former Soviet Union countries). In Q1-2006 the variable proportion of MIGs costs were 71% of the revenues, covering cost of goods sold, commissions to distributors and strategic partners. At the end of March the network has grown to more than 150.000 distributors of which 10-15% is defined as active. All sales are prepaid leaving MIG without any debtors’ risk.
By offering attractive income opportunities to our distributors we aim to further grow the business over the next quarters. The objective is to achieve increased levels of new distributors compared to the last period. As there are no material marketing costs planned for Q2, there are good prospects for improvement in the result.
Oslo, 24 May 2006
The Board of Directors of Nutri Pharma ASA

DOWNLOADS: The complete Q1 2006 Word document can be downloaded from the


page.For more information about

Meridian International Group

(MIG).Upcoming financial eventsAug 23, 2006  Results 2nd quarter 2006
Nov 16, 2006  Results 3rd quarter 2006
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