Earnings Release • Feb 27, 2018
Earnings Release
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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 10.4 (MNOK 9.1) for 4Q17, and MNOK 35.0 (MNOK 30.9) year to date.
Sales revenue in 4Q17 ended at MNOK 7.8 (MNOK 7.0), a 11 % increase compared to 4Q16. Sales revenue for the year ended at MNOK 27.8 (MNOK 24.4), a 14 % increase compared to 2016.
| MNOK | 4Q17 | 4Q16 | 2017 | 2016 |
|---|---|---|---|---|
| US | 0.3 | 0.4 | 1.3 | 1.1 |
| Europe | 4.8 | 3.5 | 17.1 | 10.3 |
| Asia | 2.6 | 3.1 | 9.4 | 12.9 |
| Total | 7.8 | 7.0 | 27.8 | 24.3 |
Other operating revenue ended at MNOK 0.9 (MNOK 0.2) for 4Q17, and MNOK 2.9 (MNOK 2.5) year to date. SkatteFUNN funding ended at MNOK 1.7 (MNOK 1.9) for 4Q17, and MNOK 4.1 (MNOK 4.1) year to date.
COGS ended at MNOK 3.5 (MNOK 2.3) in 4Q17. Total COGS year to date ended at MNOK 7.3 (MNOK 7.9), which represents 26 % (32 %) of sales revenue. COGS % of over the year is as expected, but with variations from quarter to quarter.
Total operating expenses before capitalization of R&D expenses ended at MNOK 12.9 (MNOK 11.9) in 4Q17, and MNOK 46.4 (MNOK 34.2) year to date.
Operating costs include total salary and social expenses of MNOK 7,8 (MNOK 7.1) and other expenses of MNOK 5.1 (MNOK 4.8) for 4Q17. Total salary and social expenses year to date ended at MNOK 28.4 (MNOK 20.0) and other expenses ended at MNOK 18.0 (MNOK 14.2). The increase is according to the planned acceleration of activities.
Total operating expenses after capitalization of R&D expenses ended at MNOK 11.9 (MNOK 9.5) in 4Q17, and MNOK 40.9 (MNOK 30.8) year to date.
R&D expenses amounted to 37 % (31 %) of total operating expenses before capitalization for 4Q17, and 36 % (33 %) year to date.
Operating profit before depreciation and amortization (EBITDA) ended at MNOK -5.0 (MNOK -2.7) for 4Q17, and MNOK -13.2 (MNOK - 7.8) year to date.
Net financial income/expense ended at MNOK 0.5 (MNOK 0.6) for 4Q17, and MNOK 1.1 (MNOK 1.1) year to date.
Net profit ended at MNOK -5.3 (MNOK -2.8) for 4Q17, and MNOK -15.2 (MNOK -8.9) year to date.
Cash and cash equivalents as of 31.12.2017 were MNOK 147.0 (MNOK 76.0). 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 145.0, is placed in both savings accounts and current accounts.
Accounts receivables as of 31.12.2017 were MNOK 6.8 (MNOK 2.9). The increase in accounts receivables is due to high sales figures invoiced in December, paid in January and February 2018.
Inventory as of 31.12.2017 were MNOK 11.1 (MNOK 7.5).
Cash flow from operating activities ended at MNOK -18.7 (MNOK -7.9) year to date and MNOK -0.8 (MNOK -2.5) for 4Q17.
Cash flow from investment activities ended at MNOK -6.9 (MNOK -4.5) year to date and MNOK -1.6 (MNOK -0.6) for 4Q17. Included in investment activities are capitalization of R&D expenses, which in 4Q17 amounted to MNOK 1.1 (MNOK 2.4). This gives a total capitalization of MNOK 5.5 (MNOK 3.4) year to date.
Cash flow from financial activities ended at MNOK 96.5 (MNOK 20.4) year to date and MNOK 0.5 (MNOK 20.0) for 4Q17.
Sales of fCAL turbo® is the strongest contributor to the 16% sales growth from Q3 to Q4. Sales of Cystatin C to China has also seen an increase from Q3 to Q4.
Clinical studies for Gentian new plasma Calprotectin assay, GCAL, were initiated in clinical laboratories in Sweden, Italy, and US. The objective of these projects are to demonstrate that the new product may have a potential to be superior in diagnosing and monitoring sepsis, severe inflammations and infections, and inflammatory diseases like rheumatoid arthritis.
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.
Optimization of ultrasensitive assays for cardiovascular diseases continues, and prototype studies of assays for monitoring therapy of HIV infections are initiated.
Gentian expects growth in FCal and Cystatin C to continue. In addition, the company will continue its endeavor to establish clinical evidence for the use of GCAL in sepsis and inflammation.
Within R&D, Gentian expects to demonstrate proof-of-concept on at least one new tests and progress into the verification phase for our cardiovascular marker. The company will also focus on preparing for new commercial launches in 2019 and 2020.
Gentian's international patent application; PCT/EP2017/06645 entitled "Assay device and method for assessing blood cells", was made public by World Intellectual Property Organization on February 1 2018.
There are no additional events to report after the balance sheet date.
20 largest shareholders in Gentian Diagnostics AS as of 31.12.2017 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 | 848,093 | 6.06% |
| Vatne Equity AS | 760,000 | 5.43% |
| Silvercoin Industries AS | 585,186 | 4.18% |
| Vingulmork Predictor AS | 535,710 | 3.83% |
| Verdipapirfondet DNB SMB | 484,900 | 3.46% |
| Statoil Pensjon | 400,131 | 2.86% |
| Portia AS | 375,000 | 2.68% |
| Bård Sundrehagen | 357,010 | 2.55% |
| Strawberry Capital AS | 300,300 | 2.15% |
| Cressida AS | 235,000 | 1.68% |
| Spar Kapital Investor AS | 234,000 | 1.67% |
| Norda ASA | 231,720 | 1.66% |
| OM Holding AS | 209,000 | 1.49% |
| Marstal AS | 202,000 | 1.44% |
| Altitude Capital AS | 200,000 | 1.43% |
| DNB NOR Markets | 200,000 | 1.43% |
| Mutus AS | 187,210 | 1.34% |
| Employee Shareholders | 204,266 | 1.46% |
| Other Shareholders | 2,699,635 | 19.29% |
| Total Shares | 13,996,293 | 100.00% |
| Statement of Comprehensive Income Gentian Group | ||||||
|---|---|---|---|---|---|---|
| ------------------------------------------------- | -- | -- | -- | -- | -- | -- |
| 2017 | 2017 | 2016 | 2016 | |
|---|---|---|---|---|
| (figures in NOK thousands) | Q4 | 01.01-31.12 | Q4 | 01.01-31.12 |
| Operating Revenue | ||||
| Sales revenue | 7,794 | 27,845 | 6,978 | 24,321 |
| Royalties | - | 96 | 48 | 48 |
| Other operating revenue | 910 | 2,908 | 224 | 2,471 |
| SkatteFUNN - tax deduction | 1,689 | 4,139 | 1,855 | 4,058 |
| Total Operating Revenue | 10,392 | 34,989 | 9,105 | 30,897 |
| Operating Expenses/Costs | ||||
| Cost of goods sold | -3,502 | -7,263 | -2,286 | -7,870 |
| Operating costs | -12,891 | -46,446 | -11,869 | -34,201 |
| Capitalization | 1,033 | 5,534 | 2,380 | 3,422 |
| Total Operating Expenses/Costs | -15,359 | -48,175 | -11,776 | -38,649 |
| EBITDA | -4,967 | -13,186 | -2,671 | -7,752 |
| Depreciation | -776 | -3,016 | -637 | -2,304 |
| EBIT | -5,743 | -16,202 | -3,308 | -10,056 |
| Financial income/expense | 466 | 1,032 | 563 | 1,129 |
| Net Profit | -5,277 | -15,170 | -2,745 | -8,927 |
| 2017 | 2016 | |
|---|---|---|
| (figures in NOK thousands) | 31.12 | 31.12 |
| Assets | ||
| Non-Current Assets | ||
| Property, plants and equipment | 5,097 | 4,743 |
| Capitalized development costs | 16,357 | 12,333 |
| Other intangible assets | 13,641 | 14,126 |
| Loan to other companies | - | - |
| Financial assets | 1,949 | 1,870 |
| Total Non-Current Assets | 37,043 | 33,071 |
| Current Assets | ||
| Inventory | 11,092 | 7,546 |
| Accounts receivables | 6,809 | 2,855 |
| Other receivables | 5,283 | 5,399 |
| Cash and cah equivalents | 145,003 | 74,088 |
| Derivatives | - | - |
| Total Currents Assets | 168,187 | 89,889 |
| Total Assets | 205,230 | 122,960 |
| Equity and Liabilities | ||
| Equity | ||
| Net profit (Loss) | 15,170 | 8,927 |
| Other equity | -211,645 | -124,468 |
| Equity | -196,475 | -115,541 |
| Non-Current Liabilities | ||
| Interest-bearing loans and dept | -466 | - |
| Total Non-Current Liabilities | -466 | - |
| Current liabilities | ||
| Accounts payable | -3,549 | -3,519 |
| Public dept | -1,694 | -1,610 |
| Accrued expenses | -3,046 | -2,289 |
| Derivatives | - | - |
| Bank overdraft | - | - |
| Total Current Liabilities | -8,288 | -7,419 |
| Total Equity and Liabilities | -205,230 | -122,960 |
| 2017 31.12 |
2017 30.06 |
2016 31.12 |
2016 30.06 |
|
|---|---|---|---|---|
| (figures in NOK thousands) | ||||
| Cash Flow from Operating Activities | ||||
| Net profit (loss) | -15,172 | -4,917 | -8,927 | -1,440 |
| - | - | - | - | |
| Depreciation | 3,016 | 1,492 | 2,304 | 1,076 |
| Change Inventory | -3,546 | -3,504 | -3,671 | -1,851 |
| Change Accounts Receivables | -3,954 | -1,894 | 1,137 | 1,732 |
| Change Accounts Payables | 29 | -336 | 1,234 | 987 |
| Change in other short-term receivables/ liabilities | 953 | -2,642 | 21 | -2,396 |
| Net Cash Flow from Operating Activities | -18,673 | -11,801 | -7,902 | -1,893 |
| Cash Flows from Investment Activities | ||||
| Acquisition of Property, plant and equipment | -1,357 | -254 | -3,684 | -2,942 |
| Investment in intangible assets | -5,534 | -4,008 | -3,422 | -725 |
| Investment in other companies | - | - | 3,329 | - |
| Loan to other companies | - | - | - | - |
| Other changes in financial items | - | - | -702 | -729 |
| Net Cash Flow from Investment Activities | -6,891 | -4,262 | -4,479 | -4,396 |
| Cash Flow from Financial Activities | ||||
| New debt | 466 | - | - | - |
| Downpayment of loans | - | - | - | - |
| Change in Bankoverdraft | - | - | - | - |
| Cash flows from share issues | 96,069 | 96,069 | 20,400 | 400 |
| Dividend payment | - | - | - | - |
| Net Cash Flow from Financial Activities | 96,535 | 96,069 | 20,400 | 400 |
| Net Change in Cash and Cash Equivalents | 70,971 | 80,006 | 8,019 | -5,890 |
| Cash flow from last period | 75,958 | 75,958 | 67,934 | 67,934 |
| Currency adjustment | 23 | 28 | 5 | -7 |
| Net Cash and Cash Equivalents | 146,951 | 155,991 | 75,958 | 62,036 |
*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) | -4,917,211 | -4,917,211 | |||
| 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 | 18,803 | 18,803 | |||
| As of 30th June 2017 | 1,399,629 | 224,142,533 | 1,467,131 | -20,297,449 | 206,711,844 |
| Net profit (loss) | -10,252,694 | -10,252,694 | |||
| Proceeds from share issue | - | ||||
| Share Issue Cost | - | ||||
| Other changes in equity | 16,149 | 16,149 | |||
| As of 31st December 2017 | 1,399,629 | 224,142,533 | 1,467,131 | -30,533,995 | 196,475,298 |
The interim report for Q4 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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