Third Quarter Results 2004

19.10.2004 - Nutri Pharma ASA (OSE: NUT) today announced that its loss for the first nine months of 2004 was NOK 9.8 million compared to a loss of NOK 8.5 million in the same period 2003....

Oslo, October 19, 2004

Nutri Pharma ASA (OSE: NUT) today announced that its loss for the first nine months of 2004 was NOK 9.8 million compared to a loss of NOK 8.5 million in the same period 2003.  Revenues declined from NOK 10.1 million in the first 9 months of 2003 to NOK 3.8 million in the same period of 2004. The decline in revenues is mainly due to an upfront payment related to a new licence agreement with Nycomed in 2003, lower sales of Scan Diet™ in the US and the discontinuation of Nutriplan™ in Australia/New Zealand. Nutri Pharma has decided on a new strategic focus whereby a majority of its remaining capital is intended to be invested in a direct sales project.

All figures in NOK 1000

 

 

 

 

INCOME STATEMENT

9M 2004

9M 2003

2003

2002

 

Total revenue

3 756

10 089

10 999

51 263

Total operating expenses

13 830

27 707

31 867

132 155

Results of operations

-10 074

-17 618

-20 868

-80 892

Total financial income and expenses

281

9 106

10 348

14 307

Ordinary profit before taxes

-9 793

-8 512

-10 520

-66 586

Tax on ordinary results

 

 

 

 

Results of the period
EPS (NOK)

-9 793
-0.14

-8 512
0.11

-10 520
-0.15

-66 586
-0.93



 

 

 

 

BALANCE SHEET

 

30.09.2004

31.12.2003

31.12.2002

 

Total long term assets

 

9 183

11 569

26 051

Total current assets

 

19 364

26 635

234 251

Total assets

 

28 547

38 204

260 301

Total equity

 

25 233

34 635

242 171

Total liabilities

 

3 314

3 569

18 130

Total equity and liabilities

 

28 547

38 204

260 301

 



 

 

 

 

THIRD QUARTER 2004 ACCOUNTS
Nutri Pharma had total revenues of NOK 3.8 million in the first 9 months of 2004, down from NOK 10.1 million the previous year. The significant reduction in revenues is mainly due to an upfront payment related to a new licence agreement with Nycomed, lower sales of Scan Diet™ in the US and the discontinuation of Nutriplan™ in Australia/New Zealand. Royalty revenues declined from NOK 5.7 million in the first 9 months of 2003 to NOK 3.5 million in 2004.Operating expenses were reduced from NOK 27.7 million during the first 9 months of 2003, including a NOK 8 million write off of intangible fixed assets, to NOK 13.8 million in 2004. The operating loss was NOK 17.6 million in the first 9 months of 2003 compared to a loss of NOK 10.1 million in the same period 2004. Interest income declined from NOK 9.1 million to NOK 0.3 million mainly as a result of the repayment of NOK 197.6 million to shareholders in December 2003. The net loss for the first 9 months of 2004 was NOK 9.8 million compared to a loss of NOK 8.5 million in the same period of 2003.Cash and other liquid assets were NOK 18.5 million as of September 30 2004 compared to NOK 25.2 million as of December 31 2003.COMMERCIAL UPDATE
Nordic - Nutrilett®

Sales of Nutrilett® in the Nordic countries during the first 9 months of 2004 amounted to NOK 70.0 million compared to NOK 56.2 million in the same period of 2003, an increase of 25%. As previously announced, Ferd Private Equity acquired the consumer health division of Nycomed, Collett Pharma AS, where Nutrilett is one of the core brands, in December 2003.Norway – Vita Hjertego
In September 2003 the Norwegian consumer goods company Mills DA (part of the Agra Group which is partly owned by Unilever) 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 product is a niche product in the small Norwegian market and has only generated limited royalty revenue for Nutri Pharma in 2004.

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 below forecast and this has impacted volumes. As previously announced, the revenue impact for Nutri Pharma in 2004 will be limited.US - Scan Diet™
Sales of Scan Diet™ amounted to USD 0.7 million for the first 9 months of 2004, down from USD 3 million in the same period of 2003. The future for Scan Diet is uncertain.OUTLOOK
Since being listed on Oslo Stock Exchange in May 2000, Nutri Pharma has not been successful in its strategy of licensing its technology to various marketing partners internationally. The Company’s royalty revenues are far below expectations. Nutri Pharma has over the last two years explored various alternatives for a possible sale of the Company or parts of its business or a strategic alliance with another company. However, the results of these processes have been disappointing and have not resulted in any transactions. As announced on May 13 2004, Nutri Pharma has retained Enskilda Securities to assist in exploring, and developing strategic alternatives. No such alternatives have been identified.Over the last 1_ years Nutri Pharma has explored alternative distribution channels whereby the company will be able to take part in 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 project. 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 weight management product (“Nutrilett”) in various new markets; initially in certain countries in Eastern Europe and Asia with a possible launch in the first half of 2005. This company will distribute the weight management product through a network which was established in July 2003 and has at present more than 60.000 distributors of which approximately 10-15% are active at any point in time. The network currently distributes art and skin care products. Nutri Pharma will have no ownership in the art and skin care businesses.A launch of Nutri Pharma’s weight management product is, among others, subject to the necessary product approvals being obtained. Nutri Pharma will contribute substantial financial resources to the business development phase and intends to invest a majority 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.Nutri Pharma has previously announced that a hearing related to the European patent opposition case which was filed in November 2001 was scheduled for May 2004. The European Patent Office (EPO) postponed this hearing for internal reasons and a date has now been set for early 2005.As announced on September 1 2004, Nutri Pharma has been informed by the EPO that the EPO has received notice of opposition concerning another patent that has been granted to NUT for the European territory regarding NUT`s propritary technology for combining soy protein, dietary fibres and a phytoestrogen compound and use thereof in the prevention of and/or treatment of cardiovascular diseases. In light of the significant interest in the field of soy and cardiovascular health and given the opposition filed in November 2001 regarding another patent family, this opposition was not unexpected. NUT will carefully review the new opposition case. The proceedings of the new opposition case are also expected to be lengthy.The founder and majority shareholder of Nutri Pharma, Lars H. Høie, announced on October 14 that he will offer to acquire all outstanding shares of Nutri Pharma at NOK 2.25 per share. Lars H. Høie has been informed that the board of directors of Nutri Pharma may consider proposing to an extraordinary general meeting that Nutri Pharma apply for a de-listing of its shares from Oslo Stock Exchange depending on the level of acceptance to the offer.The quarterly report is based on the same accounting principles as the latest published annual accounts and is in accordance with the Norwegian Accounting Standard for interim financial reporting.Oslo October 19, 2004


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