Quarterly Report • Nov 15, 2017
Quarterly Report
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Gentian Diagnostics AS is a medical diagnostics company listed on Merkur Market, Oslo Stock Exchange with the ticker "GENT-ME".
Gentian is headquartered in Moss, Norway, with a representative office in China and distribution subsidiaries in Sweden and USA.
Gentian designs, develops and markets in vitro diagnostic reagents (IVD) based on its proprietary NanosenseTM technology. The goal is to offer efficient and accurate reagents within the areas of kidney disease, cardiac disease, inflammation and veterinary medicine. The NanosenseTM technology will enable users to move assays from low volume immunology platforms to fully automated, high throughput instruments with shorter turnaround times, better workflow and improved cost efficiency. The subsidiary PreTect AS develops and manufactures molecular diagnostic tests to detect oncogenic activity in cervical samples. The products PreTect SEE and PreTect HPV Proofer contribute to earlier detection of cervical cancers.
Comparative numbers for Gentian 2016 in ()
Total operating revenue ended at MNOK 8.0 (MNOK 6.0) for 3Q17, and MNOK 24.6 (MNOK 21.8) year to date.
Sales revenue in 3Q17 ended at MNOK 6.7 (MNOK 4.0), a 66 % increase compared to 3Q16. Sales revenue year to date ended at MNOK 20.1 (MNOK 17.3).
| MNOK | 3Q17 | 3Q16 | 1Q-3Q17 | 1Q-3Q16 |
|---|---|---|---|---|
| US | 0,4 | 0,2 | 1,0 | 0,7 |
| Europe | 3,5 | 1,8 | 12,3 | 6,8 |
| Asia | 2,7 | 2,0 | 6,8 | 9,8 |
| Total | 6,7 | 4,0 | 20,1 | 17,3 |
Other operating revenue ended at MNOK 0.6 (MNOK 1.1) for 3Q17. SkatteFUNN funding ended at MNOK 0.7 (MNOK 0.9) for 3Q17.
COGS ended at MNOK 1.5 (MNOK 1.4) in 3Q17, which represents 23 % (34 %) of sales revenue. Total COGS year to date ended at MNOK 3.8 (MNOK 5.6), which represents 19 % (32 %) of sales revenue. The lower COGS % is due to improved production processes and more sales of products with higher margins.
Total operating expenses before capitalization of R&D expenses ended at MNOK 11.3 (MNOK 9.2) in 3Q17, and MNOK 33.6 (MNOK 22.3) year to date.
Operating costs include total salary and social expenses of MNOK 7,5 (MNOK 5.5) and other expenses of MNOK 3.7 (MNOK 3.7) for 3Q17. Total salary and social expenses year to date ended at MNOK 20.7 (MNOK 13.1) and other expenses ended at MNOK 12.9 (MNOK 9.3). The increase is according to the planned acceleration of activities.
Total operating expenses after capitalization of R&D expenses ended at MNOK 10.8 (MNOK 8.9) in 3Q17, and MNOK 29.1 (MNOK 21.3) year to date.
R&D expenses amounted to 35 % (33 %) of total operating expenses before capitalization for 3Q17, and 35 % (34 %) year to date.
Operating profit before depreciation and amortization (EBITDA) ended at MNOK -4.3 (MNOK -4.2) for 3Q17, and MNOK -8.2 (MNOK - 5.1) year to date.
Net financial income/expense ended at MNOK 0.1 (MNOK 0.1) for 3Q17, and MNOK 0.6 (MNOK 0.6) year to date.
Net profit ended at MNOK -5.0 (MNOK -4.7) for 3Q17, and MNOK -9.9 (MNOK -6.2) year to date.
Cash and cash equivalents as of 30.09.2017 were MNOK 148.9 (MNOK 56.1). Of this, MNOK 1.6 is placed in a collateral account for currency trading, and MNOK 0.3 is currently held in a deposit account. The remaining cash balance, a total of MNOK 147.0, is placed in both savings accounts and current accounts.
Accounts receivables as of 30.09.2017 were MNOK 5.8 (MNOK 1.1). The increase in accounts receivables is due to some delayed payments, which were received in October, some high sales late in September and a general increase in sales.
Inventory as of 30.09.2017 were MNOK 11.9 (MNOK 6.5). The increase in inventory is due to more products, increased demand and building of security inventory.
Cash flow from operating activities ended at MNOK -17.8 (MNOK -7.0) year to date and MNOK -6.0 (MNOK -5.1) for 3Q17.
Cash flow from investment activities ended at MNOK -5.3 (MNOK -5.2) year to date and MNOK -1.0 (MNOK -0.8) for 3Q17. Included in investment activities are capitalization of R&D expenses, which in 3Q17 amounted to MNOK 0.5 (MNOK 0.3). This gives a total capitalization of MNOK 4.5 (MNOK 1.0) year to date.
Cash flow from financial activities ended at MNOK 96.1 (MNOK 0.4) year to date and MNOK 0.0 (MNOK 0.0) for 3Q17.
Sales in 3Q17 showed an increase of 66 % compared to 3Q16, ending the quarter with a sales revenue of MNOK 6.7. The increase is, amongst other things, driven by increased sales of fCAL turbo. The decrease from 2Q17 to 3Q17 of 23 % is due to the 2MNOK one-off order in 2Q17 for Cystatin C from our previous distributor in China.
Year to date, sales revenue ended at 20.1 MNOK, which is 16 % up from the same period in 2016.
The GCAL test (calprotectin in blood samples) was launched in July, resulting in an increase of available R&D resources to focus on other key projects, such as:
Due to current sales status (YTD) and estimated sales until end of the year, Gentian expects total revenues for 2017 to end moderately higher than in 2016. This is slightly better than communicated at the beginning of the year.
Within R&D, Gentian expects to deliver a proof-of-concept on a new diagnostic test during 4Q17.
On October 3, 2017, the Critical Care and Resuscitation Journal published an article demonstrating the advantage of Gentians new assay product GCAL, testing calprotectin in blood plasma for the prediction and diagnosis of bacterial infections in critically ill patients.
On November 6, 2017, Gentian announced that the PCT (The Patent Cooperation Treaty) authority had decided that our international patent application; PCT/EP2016/067639 entitled "Method for assessing cell surface receptors of blood cells", is patentable in its entire set of claims.
There are no additional events to report after the balance sheet date.
20 largest shareholders in Gentian Diagnostics AS as of 30.09.2017 according to VPS:
| Shareholder | Number of Shares | % |
|---|---|---|
| Holta Life Sciences AS | 2 028 502 | 14,49 % |
| Salix AS | 1 368 630 | 9,78 % |
| Safrino AS | 1 350 000 | 9,65 % |
| Storebrand Vekst | 1 240 611 | 8,86 % |
| Silvercoin Industries AS | 543 986 | 3,89 % |
| Vingulmork Predictor AS | 535 710 | 3,83 % |
| Verdipapirfondet DNB SMB | 484 900 | 3,46 % |
| Statoil Pensjon | 400 131 | 2,86 % |
| Vatne Equity AS | 394 051 | 2,82 % |
| Portia AS | 375 000 | 2,68 % |
| Arctic Funds PLC | 361 945 | 2,59 % |
| Bård Sundrehagen | 357 010 | 2,55 % |
| Strawberry Capital AS | 300 300 | 2,15 % |
| Kiristianro AS | 300 000 | 2,14 % |
| Cressida AS | 235 000 | 1,68 % |
| Spar Kapital Investor AS | 234 000 | 1,67 % |
| OM Holding AS | 209 000 | 1,49 % |
| Marstal AS | 202 000 | 1,44 % |
| DNB NOR Markets | 200 000 | 1,43 % |
| Mutus AS | 187 210 | 1,34 % |
| Employee Shareholders | 204 266 | 1,46 % |
| Other Shareholders | 2 484 041 | 17,75 % |
| Total Shares | 13 996 293 100,00 % |
| Statement of Comprehensive Income Gentian Group | ||||
|---|---|---|---|---|
| -- | ------------------------------------------------- | -- | -- | -- |
| 2017 | 2017 | 2016 | 2016 | |
|---|---|---|---|---|
| (figures in NOK thousands) | Q3 | 01.01-30.09 | Q3 | 01.01-30.09 |
| Operating Revenue | ||||
| Sales revenue | 6 666 | 20 051 | 4 016 | 17 343 |
| Royalties | - | 96 | - | - |
| Other operating revenue | 608 | 1 999 | 1 146 | 2 247 |
| SkatteFUNN - tax deduction | 687 | 2 451 | 876 | 2 203 |
| Total Operating Revenue | 7 961 | 24 597 | 6 038 | 21 792 |
| Operating Expenses/Costs | ||||
| Cost of goods sold | -1 510 | -3 761 | -1 364 | -5 584 |
| Operating costs | -11 278 | -33 555 | -9 224 | -22 332 |
| Capitalization | 493 | 4 501 | 317 | 1 042 |
| Total Operating Expenses/Costs | -12 295 | -32 815 | -10 271 | -26 873 |
| EBITDA | -4 334 | -8 219 | -4 233 | -5 081 |
| Depreciation | -748 | -2 239 | -591 | -1 667 |
| EBIT | -5 081 | -10 458 | -4 824 | -6 748 |
| Financial income/expense | 106 | 566 | 82 | 566 |
| Net Profit | -4 975 | -9 892 | -4 742 | -6 182 |
3. Quarter Statement of Comprehensive Income in 2017 is not audited
| 2017 | 2016 | 2016 | |
|---|---|---|---|
| (figures in NOK thousands) | 30.09 | 31.12 | 30.09 |
| Assets | |||
| Non-Current Assets | |||
| Property, plants and equipment | 4 777 | 4 743 | 3 950 |
| Capitalized development costs | 15 701 | 12 333 | 10 245 |
| Other intangible assets | 13 762 | 14 126 | 9 161 |
| Loan to other companies | - | - | - |
| Financial assets | 1 944 | 1 870 | 2 389 |
| Total Non-Current Assets | 36 184 | 33 071 | 25 744 |
| Current Assets | |||
| Inventory | 11 883 | 7 546 | 6 502 |
| Accounts receivables | 5 813 | 2 855 | 1 126 |
| Other receivables | 7 624 | 5 399 | 7 656 |
| Cash and cah equivalents | 146 961 | 74 088 | 53 742 |
| Derivatives | - | - | 78 |
| Total Currents Assets | 172 280 | 89 889 | 69 104 |
| Total Assets | 208 464 | 122 960 | 94 848 |
| Equity and Liabilities | |||
| Equity | |||
| Net profit (Loss) | 9 892 | 8 927 | 6 182 |
| Other equity | -211 600 | -124 468 | -95 455 |
| Equity | -201 708 | -115 541 | -89 273 |
| Non-Current Liabilities | |||
| Interest-bearing loans and dept | - | - | - |
| Total Non-Current Liabilities | - | - | - |
| Current liabilities | |||
| Accounts payable | -3 361 | -3 519 | -3 484 |
| Public dept | -1 000 | -1 610 | -753 |
| Accrued expenses | -2 396 | -2 289 | -1 338 |
| Derivatives | - | - | - |
| Bank overdraft | - | - | - |
| Total Current Liabilities | -6 756 | -7 419 | -5 574 |
| Total Equity and Liabilities | -208 464 | -122 960 | -94 848 |
3. Quarter Statement of Financial Position is not audited
| 2017 | 2017 | 2017 | 2016 | 2016 | |
|---|---|---|---|---|---|
| (figures in NOK thousands) | Q3 | Q2 | Q1 | 31.12 | 30.06 |
| Cash Flow from Operating Activities | |||||
| Net profit (loss) | -4 975 | 412 | -5 329 | -8 927 | -1 440 |
| - | - | - | - | - | |
| Depreciation | 748 | 708 | 784 | 2 304 | 1 076 |
| Change Inventory | -832 | -1 841 | -1 663 | -3 671 | -1 851 |
| Change Accounts Receivables | -1 063 | -1 464 | -430 | 1 137 | 1 732 |
| Change Accounts Payables | 177 | -503 | 167 | 1 234 | 987 |
| Change in other short-term receivables/ liabilities | -90 | -1 236 | -1 406 | 21 | -2 396 |
| Net Cash Flow from Operating Activities | -6 036 | -3 924 | -7 877 | -7 902 | -1 893 |
| Cash Flows from Investment Activities | |||||
| Acquisition of Property, plant and equipment | -529 | -30 | -224 | -3 684 | -2 942 |
| Investment in intangible assets | -493 | -1 727 | -2 281 | -3 422 | -725 |
| Investment in other companies | - | - | - | 3 329 | - |
| Loan to other companies | - | 725 | -725 | - | - |
| Other changes in financial items | - | - | - | -702 | -729 |
| Net Cash Flow from Investment Activities | -1 022 | -1 032 | -3 230 | -4 479 | -4 396 |
| Cash Flow from Financial Activities | |||||
| New debt | - | - | - | - | - |
| Downpayment of loans | - | - | - | - | - |
| Change in Bankoverdraft | - | - | - | - | - |
| Cash flows from share issues | - | - | 96 069 | 20 400 | 400 |
| Dividend payment | - | - | - | - | - |
| Net Cash Flow from Financial Activities | - | - | 96 069 | 20 400 | 400 |
| Net Change in Cash and Cash Equivalents | -7 058 | -4 955 | 84 961 | 8 019 | -5 890 |
| Cash flow from last period | 155 991 | 160 947 | 75 958 | 67 934 | 67 934 |
| Currency adjustment | -29 | - | 28 | 5 | - 7 |
| Net Cash and Cash Equivalents | 148 905 | 155 991 | 160 947 | 75 958 | 62 036 |
3. Quarter Cash Flow Statement is not audited
*Investment in other companies relates to the acquisition of PreTect AS.
Note: 30.06.2016 and 31.12.2016 uses 31.12.2015 as a comparison and starting point in the Cash Flow Statement.
| Share Capital Share Premium Other Reserves | Other Equity | Total Equity | |||
|---|---|---|---|---|---|
| As of 31st December 2015 | 957 883 | 99 115 443 | 1 467 131 | -6 478 973 | 95 061 484 |
| Net profit (loss) | -1 440 373 | -1 440 373 | |||
| Proceeds from share issue | 3 400 | 396 440 | 399 840 | ||
| Share Issue Cost | - | ||||
| Other changes in equity | -207 | -207 | |||
| As of 30th June 2016 | 961 283 | 99 511 883 | 1 467 131 | -7 919 553 | 94 020 744 |
| Net profit (loss) | -7 486 614 | -7 486 614 | |||
| Proceeds from share issue | 152 632 | 28 847 448 | 29 000 080 | ||
| Share Issue Cost | - | ||||
| Other changes in equity | 7 126 | 7 126 | |||
| As of 31st December 2016 | 1 113 915 | 128 359 331 | 1 467 131 | -15 399 041 | 115 541 336 |
| Net profit (loss) | -9 892 446 | -9 892 446 | |||
| Proceeds from share issue | 285 714 | 99 714 291 | 100 000 005 | ||
| Share Issue Cost | -3 931 089 | -3 931 089 | |||
| Other changes in equity | -9 783 | -9 783 | |||
| As of 30th September 2017 | 1 685 343 | 319 925 735 | 1 467 131 | -34 906 964 | 201 708 023 |
3. Quarter Statement of Changes in Equity is not audited
The interim report for Q3 2017 has been prepared in accordance with IAS 34 Interim Reporting. The accounting policies applied in the interim report corresponds to what was used in preparing the annual financial statements for 2016.
The Company uses currency rates given by DNB ASA.
There are currently two projects where the Gentian Group is capitalizing R&D expenses.
Gentian calculates and recognizes SkatteFUNN funding continuously in the same year as the cost has incurred, while PreTect recognizes the SkatteFUNN funding when the refund has been received. As of 2017 Pretect will recognize SkatteFUNN funding continuously in the same manner as Gentian. 2Q17 is the first quarter where Pretect AS has recognized SkatteFUNN funding and includes funding that should have been recognized during 1Q17. Going forward, Pretect AS will recognize this funding on a quarterly basis.
The Group had an immaterial correction in COGS of less than 1% in 2Q16 after the 2. quarterly report of 2016 was released.
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