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Vistin Pharma — Earnings Release 2016
Jan 25, 2017
3782_iss_2017-01-25_a447a4f9-2a32-4dbf-8ffd-e845be3ad523.html
Earnings Release
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Vistin Pharma ASA : Vistin Pharma announces trading update for 2016
Vistin Pharma ASA : Vistin Pharma announces trading update for 2016
Oslo, Norway, 25 January 2017
Norwegian pharmaceutical company Vistin Pharma ASA announced today a trading
update in connection with two earlier public announcements made during the
fourth quarter of 2016.
As announced on 18 November, Vistin Pharma experienced a temporary stop in the
production of metformin at its plant in Kragerø. This has had a negative impact
on the fourth quarter results with lower volumes available for sale and one-off
operating costs leading to a negative EBITDA impact of approximately NOK 6.8
million.
As part of the Company's operational excellence programme within tablet
manufacturing (the CMO business), Vistin Pharma announced a cost savings plan on
5 December. Associated with this is a NOK 5.8 million provision for
redundancies, which has been incurred during the fourth quarter.
Preliminary adjusted EBITDA for the fourth quarter 2016 is negative NOK 1.8
million, compared to NOK 4.3 million in the same quarter of 2015, with
preliminary adjusted EBITDA for the full year of NOK 29.2 million, compared to
NOK 19.2 million in 2015. The adjusted results for the fourth quarter include
an impact of approximately NOK 5.1 million from the lower volumes available for
sale, caused by the temporary stop in production of metformin. Excluded from
adjusted EBITDA for the quarter is a NOK 5.8 million provision for redundancies
relating to the ongoing CMO cost savings programme, and NOK 1.7 million in one-
off costs relating to the reactor failure.
The Company had cash and cash equivalents of NOK 89.4 million at 31 December
"Whilst our financial figures for the fourth quarter reflect some unexpected
costs and provisions related to our CMO operational excellence programme we feel
that these changes will significantly strengthen our position in the CMO market.
I am also pleased to report that we are now back to producing metformin at full
capacity and with Q1 orders already accounting for our total volume for sale we
are confident this issue has now been resolved," says CEO Kjell-Erik Nordby.
Metformin plant in full production from 18 December
Production at Vistin Pharma's metformin plant was temporarily halted in November
due to an unscheduled maintenance stop to repair one of the reactors. A new
reactor was installed successfully and on time, and the plant resumed full
production on 18 December. As per today, the plant has produced 320 metric
tonnes (MT) of metformin.
The reactor failure resulted in on-off operating costs of approximately NOK 1.7
million. Approximately 261MT in sales volume was also lost in the fourth quarter
due to the production stop. In total, these incidents had a negative EBITDA
impact of approximately NOK 6.8 million during the fourth quarter. Further, the
installation of a new reactor has resulted in a capital expenditure of
approximately NOK 2.2 million.
The total actual sales volume of metformin API for the fourth quarter was
613MT, compared to 608MT in the same quarter of 2015. For the full year actual
sales volume was 2,784MT, compared to 2,799MT last year. The Company has orders
for approximately 770MT for the first quarter 2017, compared to actuals sales of
704MT in the same quarter in 2016, and the temporary stop in production in the
fourth quarter 2016 is not expected to have a negative impact on sales volumes
going forward.
CMO cost savings programme to reduce annual costs by NOK 20 - 30 million
On 5 December 2016, Vistin Pharma announced a cost savings plan to improve the
Company's competitiveness within tablet manufacturing. The plan includes a staff
reduction of 20-25 full-time employees at the Company's tablet manufacturing
facility, which upon completion in early 2018 will result in annualised cost
savings in the range of NOK 20-30 million.
A provision for redundancies and reorganisation of NOK 5.8 million was made in
the fourth quarter mainly relating to termination contracts entered into as of
31 December 2016. The provision covers salary costs during the termination
period, as well as severance pay. As a result of the employee reductions, total
personnel expenses within CMO are expected to be reduced by approximately NOK 9
million in 2017 when compared to 2016 (excluding any one-off provisions for
redundancies). Total costs are expected to be reduced by a further NOK 10-20
million in 2017 to 2018.
These cost savings significantly strengthen the Company's competitiveness in the
international CMO market, and enable Vistin Pharma to offer competitive prices
for tablet manufacturing going forward. Vistin Pharma's target is to increase
its production capacity from today's level of 750 million tablets by at least
50 per cent via the ongoing operational excellence program.
Preliminary financial information full-year 2016 - adjusted EBITDA 29.2 million
(NOK million) Q4 2016 Q4 2015 FY 2016 FY 2015
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Total revenue and income 93,5 104,5 394,6 227,9
Preliminary EBITDA (9,3) 13,0 21,7 27,9
Adjustments relating to
specific items:
Costs relating to the reactor 1,7 - 1,7 -
break-down
Provision for employee 5,8 - 5,8 -
reductions & reorganisation
Oher income relating to Weifa - (8,7) - (8,7)
settlement *
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Preliminary adj. EBITDA -1,8 4,3 29,2 19,2
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* Shown net of a NOK 2.5 million of sundry assets transferred
from Weifa and written off.
Vistin Pharma will present the full financial figures for the fourth quarter of
2016 on 28 February.
*****
For further information, please contact:
Kjell-Erik Nordby
CEO
+47 91 36 42 80
Gunnar Manum
CFO
+47 95 17 91 90
About Vistin Pharma
Vistin Pharma is a Norwegian pharmaceutical company producing Active
Pharmaceutical Ingredients (APIs) and solid dosage forms for the global
pharmaceutical industry. The Company has key positions in the Metformin and
Opioids markets, and a strong foundation for creating a highly efficient
Contract Manufacturing tablet production (CMO) business. Solid growth
potentials exist in all the business segments.
With more than 65 years of pharmaceutical industry experience, Vistin Pharma has
built significant capacity and expertise as an API provider. The Company has
more than 140 highly qualified employees and two manufacturing facilities in
Kragerø, Norway. Both facilities are certified according to current Good
Manufacturing Practice (cGMP) and successfully inspected by the US Food and Drug
Administration (FDA) in 2014. Vistin Pharma's headquarter is in Oslo, Norway.
This information is subject to the disclosure requirements pursuant to section
5-12 of the Norwegian Securities Trading Act.