Neptune Archives - Green Market Report

Jack SmithJune 5, 2018


Neptune Technologies and Bioresources Inc. (NEPT) announced fourth-quarter results and said revenue declined sharply year-over-year, impacted largely by the sale of its krill oil manufacturing business.

Fourth-quarter revenue came in at $7 million, aided by a rise of 14.9 percent in its Solutions Business. In the prior year, revenue was $11.8 million, though the company noted the year-ago quarter was four months, compared to three months this year.

“During the fourth quarter, we sustained an intense pace of activity in developing the cannabis business opportunity, meeting with potential suppliers and partners while continuing to move forward with the regulatory licensing process,” Neptune’s President and CEO Jim Hamilton said in a statement.

Hamilton added that more than 90 percent of the company’s $5 million capital plan has been committed, to work on areas like sight security, license compliance and carbon dioxide extraction, with the first phase of its commercialization strategy set for later this year.

“Simultaneously, we began work on Phase II and successfully completed solvent lab scale trials,” Hamilton continued. “As a consequence, we are very excited that the Board approved the $4.8 million investment for Phase 2 capacity expansion.”

Shares of Neptune, which trade on both the Toronto Stock Exchange and NASDAQ, finished lower in Tuesday trading. NASDAQ-listed shares fell 0.7 percent to $2.75, giving the company a market cap of just over $218 million.

During the period, the company had a net loss of $4.8 million, compared to a gain of $300,000 in the prior period, and suffered a non-FRS (International Financial Reporting Standards) loss of $4.8 million, compared to an Adjusted EBITDA gain of $900,000 in the prior period, as the company continued to invest in its cannabis business.

Though the results may seem bleak, there were some bright spots for the company, particularly its Solution Business, Hamilton said. It also signed an agreement with Tetra Biopharma for “purified cannabinoid oil-based products targeting pain and inflammation,” the company said in a statement.

“As we move into fiscal 2019, we are keenly focused on executing our strategy to establish Neptune as an innovative health and wellness products company focused on the extraction, purification, and formulation of cannabis oil ingredients and differentiated products to serve customers globally,” Hamilton said.

Quebec-based Neptune, which sells products such as MaxSimil, premium krill oil directly to consumers and is working on a variety of other cannabinoid-based products, received $23.7 million from the sale of its krill manufacturing business, leaving it with $26.7 million in cash at the year-end.

Krill noted that the company’s “healthy cash balance” and its removal from the capital-intensive manufacturing business put it in a good spot for the rest of 2018 into 2019.

“[W]e have the financial strength to fund our cannabis business opportunity through commercialization based on our current timeline of developments,” Hamilton concluded.

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