Third Quarter Report 2005

17.11.2005 – Nutri Pharma ASA (OSE: NUT) today reports revenues of NOK 19 mill in Q3 vs NOK 1.2 mill. in Q3 2004. As previously announced, Nutri Pharma ASA acquired 100% of the shareholding in Meridian International Group (MIG) with effect per 1 July 2005...

Oslo, November 17, 2005

Nutri Pharma ASA (OSE: NUT) today reports revenues of NOK 19 mill in Q3 vs NOK 1.2 mill. in Q3 2004. As previously announced, Nutri Pharma ASA acquired 100% of the shareholding in Meridian International Group (MIG) with effect per 1 July 2005. Due to quality problems with the first batch, following the introduction of Nutri Pro in Q2, sales were postponed until fresh product could be manufactured and distributed. This, and the subsequent higher selling costs in MIG required to remedy the situation, contributed to a loss in Q3 of NOK -9,9 million.

As from 1 July 2005 Nutri Pharma has two business segments; Nordic, with the existing royalty revenues, and Russia + CIS countries through the direct sales organisation of MIG. The revenues and results this quarter are distributed as follows (In NOK);

Q3 2005

Q3 2004

Total revenues Nordic

1,0 million

1,2 million

Total revenues MIG

18,0 million




Loss in Nordic

-1,8 million

-3,3 million

Loss in MIG

-8,1 million









Q3 2005

Q3 2004

All figures in NOK 1000

Jan–Sept 2005

Jan–Sept 2004

Fin year 2004


19 002

1 235

Total revenue

21 215

3 466

4 634

28 825

4 605

Total operating expenses

39 692

13 542

16 253

-9 823

-3 370

Results of operations

-18 477

-10 076

-11 619



Financial income




-9 905

-3 298

Profit before taxes

-18 484

-9 793

-11 266

Tax on ordinary results

-9 905

-3 298

Results of the period

-18 484

-9 793

-11 266


















Total non-current assets


107 966

9 183

8 378

Total current assets


9 869

19 364

18 758

Total assets


117 835

28 547

27 136

Total equity


8 647

26 102

25 226

Total liabilities


109 188

2 445

1 910

Total equity and liabilities


117 835

28 547

27 136






Nutri Pharma will be reporting its financial results and financial position in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union from 1 January 2005. As an attachment to this report, Nutri Pharma presents and explains the transition from Norwegian Generally Accepted Accounting Practice (N GAAP) to IFRS. Nutri Pharma has prepared an opening balance sheet at the date of the transition, which is 1 January 2004. The interim reports and the annual accounts for 2005 will be prepared in accordance with IFRS and include comparative information for 2004. The financial impact of the transition is limited and the only adjustment with impact on result for financial year 2004 is a de-recognition of an accrual of NOK 0,5 million.

Nutri Pharma had royalty revenues from the Nordic area of NOK 1.0 million in Q3 2005, compared to NOK 1.2 million in Q3 the previous year. As a result of implementation of the new sales strategy through the direct sales organization of MIG, additional revenues of NOK 18 million have been achieved in this quarter.Operating expenses increased from NOK 4.6 million Q3 2004 to NOK 28.8 million in the third quarter of 2005, with NOK 3,0 million of this total in Nutri Pharma ASA and NOK 25,8 million in MIG respectively. Due to quality problems experienced with the first batch of NutriPro, which was supplied into the distribution network, MIG had to stop supplying the product for a period until new batches could be manufactured and distributed. The supplier of soy protein causing these problems is no longer a supplier of soy proteins to the product. In order to remedy the effect of delayed distribution of products, this resulted in higher selling costs than normal for MIG in Q3 2005.Consequently, the consolidated operating loss is NOK -9,9 million in Q3 2005. Same quarter previous year the loss was NOK -3.3 million. The comparable operating loss for Nutri Pharma ASA in Q3 2005 without the inclusion of MIG is NOK -1,7 million.Nutri Pharma ASA acquired all shares in MIG as per 1 July 2005 for a consideration to consist of a maximum of 24 million Nutri Pharma ASA shares. Nutri Pharma ASA has agreed with the sellers of MIG that the consideration shall be made in installments, the first being Nutri Pharma`s 6 mill. own treasury shares (subject to finalization of a due diligence of MIG), and the remaining 18 mill new shares to be issued, at the latest by 31 March 2007. The obligation is at September 30 2005 showing as a liability of NOK 92,4 million in the Balance sheet.MIG, which was established on 20 March 2005 has secured short term loans on favorable terms to finance the operational losses.Cash and other liquid assets were NOK 5,9 million as of September 30 2005, compared to NOK 7,4 million as of June 30 2005.


Nutrilett, which is distributed through Collett Pharma being one of their core product lines, is generating a royalty revenue of approximately NOK 1,0 million. The royalty revenue is expected to be at the same level moving forward.MIG – Russia and CIS countries
Nutri Pharma’s acquisition of 100% of the shareholding in Meridian International Group (MIG) has resulted in a strong sales growth this quarter adding around NOK 18 million revenues to the existing business. Nutri Pro accounts for more than 50% of the MIG revenues in Q3 2005 and the remainder is derived from sales of Art and Cosmetics products. All sales are prepaid leaving MIG without any debtors’ risk. For a further report of MIG we refer to, disclosed on 14 October 2005.

Nutri Pharma’s focus will be on developing sales through MIG, which has a considerable potential moving forward. Nutri Pro sales, despite problems during initial launch in Q2, are showing steady improvement in turnover and profitability, and we expect this to continue going forward.Due to a change of the Cosmetics product line, with a market launch expected to take place in Q1 2006 (see comments below), it is expected that total revenues in Q4 will be lower than the past quarter. We are focusing on reducing operating costs, and the projection is a considerably smaller loss for MIG in Q4 2005 than in the previous quarter.Nutri Pharma has on 16 November entered into a long term agreement with the Norwegian company Kilda to market and distribute Kilda’s patented, well documented skin care products through Nutri Pharma’s subsidiary, the distribution company MIG. It is planned to launch the new cosmetics line in Q1-2006 in Russia and CIS countries. The cosmetics line is expected to contribute positively to MIG’s sales and profitability.Oslo, 17 November 2005
The Board of Directors of Nutri Pharma ASADOWNLOADS: The complete Q3 Report 2005 Word document can be downloaded from the INVESTOR page.


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