First half year report 2008

MIG reports revenues of MNOK 23.4 which is 32 % higher than Q1 2008 and an increase of 34 % compared with Q2 2007.


MIG reports revenues of MNOK 23.4 which is 32 % higher than Q1 2008 and an increase of     34 % compared with Q2 2007. EBIT is reported at MNOK 1.7.As reported last quarter the efforts made last year to reduce costs and improve sales now appear to be producing the desired results. In addition new products have been pre launched in June 2008.

Royalty income is MNOK 2.0, which is 58 % higher than Q1 2008, and 22 % higher than same period last year. This represents retail sails of app. MNOK 60.

Nutri5 was launched in February, and have been well received in the market. The sale in Q1 was MNOK  0.9, and sales in Q2 was MNOK 1.4.

Consolidated sales in second quarter is MNOK 26.7 with a positive EBITDA of MNOK 1.9, and EBIT of MNOK 0.8.

                          FIRST HALF YEAR 2008  REPORT

The statements below are due to new regulations under the Norwegian Securities Trading Act, and related to Nutri Pharma`s development in the first six months of 2008 compared to the first six months of 2007, unless otherwise stated.

Nutri Pharma today reports consolidated revenues of MNOK 46.5 million (an increase of 47 % compared with H1 2007) and a consolidated loss of MNOK 2.6 million for the first half year 2008. This compares to revenues of MNOK 32.5 and a loss of MNOK 6.7 million in the first half year of 2007. The results for H1 in the Nordic region are expensed with app. MNOK 4,0 in marketing and other costs directly related to the introduction of Nutri5 and subsequent marketing of the brand.

Out of the total revenue of MNOK 46.5 in the first half year of 2008, MNOK 41.1 were recorded in MIG (Russia/CIS). Royalty revenues of MNOK 3.2, and sales of Nutri5 with MNOK 2.2 were recorded in the Nordic region.

EBITDA for the first half 2008 is negative with MNOK 0.1 compared with minus MNOK 2.2 in the first half year of 2007.


Compared to first half year of 2007 revenues in Russia/CIS have increased by 38 %. Fixed costs has been reduced with 50 %, whilst the variable costs are at the same level as last year. The restructuring implemented last year is now in this first half year showing the desired effect to increase sales and reduce cost.Total revenue in the region was MNOK 41.1. Part of the turnover in MIG derived from a pre-launch of MIG-X in June, a newly developed, netbased tool to be used by the distributors to facilitate and improve product presentations in the network. The main launch of MIG-X took place at the annual event 23 August with 1.200 distributors present.  EBITDA ended at MNOK 4.3 and  EBIT at MNOK 2.8. Compared to the same period last year the EBIT is improved by MNOK 5.0.Amortisation cost of the distributor list is MNOK 1.5, and finance cost for H1 2008 is MNOK 0.7.

Royalty income in the Nordic area deriving from the long term licence agreement for Nutrilett was MNOK 3.2. Nutri5 was launched in February 2008, and sales in H1 2008 were MNOK 2.3. EBITDA in the Nordic region was negative by MNOK 4.4 due to the costs of app MNOK 4,0 in marketing and other costs directly related to the introduction of Nutri5 as well as the subsequent marketing of the brand. Amortisation cost is MNOK 0.8, and finance income is MNOK 0.6.

Nutri Pharma operates with three business segments;
Nordic, with the existing royalty revenues, direct sale of Nutri5 through its own webshop, and Russia + CIS countries through the direct sales organisation of MIG.

For further segment information see page 10

Cash, money market fund and other liquid assets were MNOK 9.9 as of June 30 2008, compared to MNOK 27.3 as of June 30 2007.  31 March 2008 the comparable figure was MNOK 11.7. The reduction in cash and other liquids was in Q1 2008  MNOK 7.4. The main part of this reduction is related to the launch of Nutri5 and the intensive marketing  of the brand. The reduction in cash and other liquids in the second quarter of 2008 was  MNOK 1.8, and
the cash situation is stable. There is no debt in Nutri Pharma ASA.

Net financial expense was TNOK 169, compared to finance income of TNOK 265 in first half year of 2007.  

For detailed information on related party transactions refer to note 22 in Nutri Pharma`s
Annual Report for 2007. In 2008 there has been no new transactions apart from accumulated  interest on loan from main shareholder Lars Høie to the subsidiary MIG. This is further described in the annual report for 2007.

Note 21 in Nutri Pharma`s Annual Report for 2007 describes the financial risks management,
objectives and policies. The company has low financial risk factors due to the fact that the direct sales are based on cash sales, and the accounts receivable from royalty is related to a well creditworthy listed company in Norway - Orkla. The liquid part of the assets  in the company is invested in short term money market fund with low risk. There are no changes regarding the statements given in the annual report for 2007, and the risksand uncertainties described in note 21 in the annual report for 2007 are expected to remain for the next 6 months.

                            COMMERCIAL UPDATE - 1H 2008

Russia and CIS countries
MIG has increased sales by 38 % compared with the same period last year and profit (EBIT) is increased by MNOK 4.4 compared with the same period. 

Nutrilett®, Nutrilett, distributed through Axellus (Orkla) as one of their core product lines, has generated royalty revenues of approximately MNOK 3.2. This royalty revenue has steadily increased over the last few years.

After the launch in February with an extensive advertising campaign, advertising was considerably reduced. Sales efforts going forward will be focused towards the population that suffers from menopausal problems. In Norway, 250.000 women (7% of the population) suffer from one or more symptoms and approx. 150.000 of these use estrogen regularly, prescribed by doctors.


Russia / CIS
- The efforts made in 2007 have significantly improved the turnover, reduced the costs and made MIG into a profitable and growing company.
- We believe that the new  netbased tool - Mig X will continue to bring positive results in to MIG as well as increase the sales of nutritional products

Nordic region
- Nutrilett continues to give the company a stable income.
- Nutri5 will focus on obtaining growth through editorial articles in weekly/monthly magazines, and is sold through the net shop in Norway as well as our own customer
service (tel.05222).
- We are currently exploiting opportunities in direct sales channels internationally.

Central/Eastern Europe
- Nutri Pharma ASA has the 19 August 2008 signed a distribution and supply agreement with
Delpharmea Nutraceuticals AS in the Czech Republic. The agreement gives Delpharmea exclusive rights, based on minimum sales, to sell Nutri Pharma`s weight management products (`Nutrilett`) in pharmacies and supermarkets in the Czech Republic. During 2010  Delpharmea also has an option to distribute the products in certain additional
Central and Eastern European countries. The products will be launched during Q1 2009.

                          RESPONSIBILITY STATEMENT

`We confirm that, to the best of our knowledge, the condensed set of financial statements for the first half year of 2008 which has been prepared in accordance with IAS 34 Interim Financial Reporting gives a true and fair view of the Company`s consolidated assets, liabilities, financial position and results of operations, and that the interim management report includes a fair review of the information required under the Norwegian
Securities Trading Act section 5-6 fourth paragraph.`

Oslo, 28 August 2008

Trond Syvertsen, CEO +47 23 01 09 60 / + 47 91 72 14 57
Lars Helmer Enger, CFO +47 23 01 09 60 / + 47 90 84 37 71

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