Fourth Quarter and Financial Results 2004

02.02.2005 - Nutri Pharma ASA (OSE: NUT) today announced that its loss for 2004 was NOK 10.7 million compared to a loss of NOK 10.5 million in 2003....

Oslo, February 02, 2005

Nutri Pharma ASA (OSE: NUT) today announced that its loss for 2004 was NOK 10.7 million compared to a loss of NOK 10.5 million in 2003.  Nutri Pharma`s main focus is now on direct sales of Nutri Pharma`s soy based health and weight reduction product (Nutrilett®) in various new markets; initially in certain countries in Eastern Europe and Asia with a planned launch in the first half of 2005.

All figures in NOK 1000

 

 

 

 

INCOME STATEMENT

 

2004

2003

2002

 

Total revenue

 

4 984

10 999

51 263

Total operating expenses

 

16 046

31 867

132 155

Results of operations

 

-11 062

-20 868

-80 892

Total financial income and expenses

 

335

10 348

14 307

Ordinary profit before taxes

 

-10 727

-10 520

-66 586

Tax on ordinary results

 

 

 

 

Results of the period
EPS (NOK)

 

-10 727
-0.15

-10 520
-0.15

-66 586
-0.93



 

 

 

 

BALANCE SHEET

 

Dec 31 2004

Dec 31 2003

Dec 31 2002

 

Total long term assets

 

8 378

11 569

26 051

Total current assets

 

18 758

26 635

234 251

Total assets

 

27 136

38 204

260 301

Total equity

 

24 896

34 635

242 171

Total liabilities

 

2 241

3 569

18 130

Total equity and liabilities

 

27 136

38 204

260 301

 



 

 

 

 

ANNUAL ACCOUNTSNutri Pharma ASA and subsidiaries had total revenues of NOK 5.0 million in 2004, down from NOK 11.0 million the previous year. The significant reduction in revenues is mainly due to a one-off payment in 2003 related to a new license agreement with Collett Pharma (formerly Nycomed Pharma), lower sales and discontinuation of Scan Diet™ in the US and Nutriplan™ in Australia/New Zealand. Royalty revenues declined from NOK 6.4 million in 2003 to NOK 4.6 million in 2004.Operating expenses were reduced from NOK 31.9 million in 2003, including a NOK 8.6 million write off of intangible fixed assets, to NOK 16.0 million in 2004. The operating loss improved from NOK 20.9 million in 2003 to NOK 11.0 million in 2004. Net financial items declined from NOK 10.3 million in 2003 to NOK 0.3 million in 2004, mainly as a result of the repayment of NOK 197.6 million to shareholders in December 2003.  Net loss was NOK 10.7 million in 2004 compared to a net loss of NOK 10.5 million in 2003. Operating cash flow was NOK –7.6 million in 2004.Nutri Pharma’s total assets were NOK 27.1 million as of December 31 2004 compared to NOK 38.2 million as of December 31 2003. Cash and liquid short term investments were NOK 17.7 million as of December 31 2004, down from NOK 25.2 mill. as of December 31 2003. The company has after year-end ordered raw materials and engaged a third party to produce finished goods for the launch of the Company’s soy based health and weight reduction product (Nutrilett®) in certain countries in Eastern Europe and Asia and thereby used USD 150.000 of the liquid assets since December 31 2004. Further commitments in finished goods will be made in February 2005.As of December 31 2004, Nutri Pharma had intangible fixed assets of NOK 8.4 million. The intangible fixed assets represent the cost of the patent rights for Nutrilett® outside the Nordic countries and royalty rights for Nutrilett® in the Nordic countries.  These assets are amortized by about NOK 3.2 million each year. The value of the patent rights for "Nutrilett®" outside the Nordic countries, which have a book value of NOK 3.5 million, is dependent on the outcome of the launch of “Nutrilett®” in certain countries in Eastern Europe and Asia.As of December 31 2004 the company’s total equity was NOK 24.9 million or 92% of total assets. Nutri Pharma has no interest bearing debt.From January 1 2005, publicly listed companies in the EEA area are required to submit group accounts in accordance with IFRS - International Financial Reporting Standards. Nutri Pharma has initiated a study aiming to investigate the impact of the transition from Norwegian generally accepted accounting practice to IFRS will have on the company's financial statements. This work has yet to be finalized, and no conclusions can be drawn at this point, but the company assumes the consequences to be limited. The existing financial statements will be revised due to the requirement of comparable financial statements for 2004 and as a result of potential differences between Norwegian generally accepted accounting practice and IFRS. In the beginning of April 2005 and well in advance of the presentation of the interim accounts, Nutri Pharma will submit an announcement to Oslo Stock Exchange with specific information on the impact the transition to IFRS will have on net income and equity.


COMMERCIAL UPDATENordic - Nutrilett®
Sales to wholesalers of Nutrilett® in the Nordic countries during 2004 amounted to NOK 88.7 million compared to NOK 68.8 million in 2003, an increase of 29%. The retail value of Nutrilett® sales is approximately twice as high. In January 2005, Collett Pharma launched a new range of products under the Nutrilett brand.

Norway

– Vita Hjertego
In September 2003 the Norwegian consumer goods company Mills DA launched two new patés under its Vita brand containing plant oils, one of which also contains Abacor. The Vita brand is positioned as an active part of a cholesterol conscious diet. The launch is limited to Norway and will generate limited royalty revenue for Nutri Pharma.

UK

– Burgen Cholessterol
In January 2004 Nutri Pharma entered into a 5 year licence agreement with Allied Bakeries, the leading bread manufacturer in the UK, for the use of Abacor® in Burgen Cholessterol bread.  Since the launch of this product at the end of January, retail distribution has been significantly below forecast. The revenue impact for Nutri Pharma will be limited.US - Scan Diet™
The agreement with GNC regarding Scan Diet™ was terminated in December 2004, although they will continue to sell off residual stock. Alternative channels of distribution for Scan Diet in the US have not been established.


OUTLOOKDuring the last 2 years Nutri Pharma has explored alternative distribution channels whereby the company will be able to take a larger part of the value chain. As a result, the company has decided to focus its resources on the development of a direct sales business. Nutri Pharma will be 51% owner in a new direct sales company together with an experienced partner in this field.  The new entity will focus on direct sales of Nutri Pharma’s soy based health and weight management product (Nutrilett®) in various new markets; initially in certain countries in Eastern Europe and Asia, with a planned launch in the first half of 2005. This company will distribute the products through a direct sales channel which was established in July 2003 and has at present more than 90.000 distributors, out of which approximately 10-15% are active. The distributors currently sell art and skin care products.A launch of Nutri Pharma’s soy based health and weight management product (Nutrilett®) is subject to the necessary product approval being obtained. Nutri Pharma has contributed substantial financial resources to the business development phase and will invest a considerable part of its remaining capital in finished goods for this venture. While the return potential could be very attractive, this is a new venture with high risk.In November 2001, Protein Technologies International Inc. (later Solae LLC), a subsidiary of DuPont, filed an opposition against one of Nutri Pharma’s patents regarding Nutri Pharma’s proprietary technology of combining isolated soy proteins and soy fibres granted by the European Patent Office (EPO). An Oral hearing at the EPO took place on January 21 2005 in Munich, and the result is expected shortly.Oslo February 2, 2005

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