Hofseth BioCare (HBC) Q2 2024 earnings summary

Executive summary

• Achieved record sales revenue of NOK 72.2m in Q2 2024, up 42% year-over-year and 39% sequentially, driven by strong demand in premium pet and functional ingredients sectors.

• Continued progress in R&D, including identification of GLP-1 bioactivity in ProGo® peptides and promising results in CalGo® joint health studies.

• Transferred a new pharmaceutical lead (MA-022a) to HBC Immunology for further development in eosinophilic asthma, with encouraging preclinical results.

• Targeting approximately 50% sales growth and positive EBITDA by year-end 2024.

Financial highlights

• Gross operating revenue for Q2 2024 was NOK 80.4m, including NOK 8.2m from asset sales; adjusted revenue was NOK 72.2m, up from NOK 52.9m in Q2 2023.

• EBITDA for Q2 2024 was NOK -2.0m (NOK -10.2m adjusted for asset sales), compared to NOK 18.3m in Q2 2023.

• Operating loss (EBIT) was NOK -11.6m in Q2 2024, compared to a profit of NOK 8.4m in Q2 2023.

• Net loss for Q2 2024 was NOK -17.6m, versus NOK 5.8m profit in Q2 2023; EPS was NOK -0.04.

• Gross margin was 34% in Q2 2024, down from Q1 due to product mix.

Outlook and guidance

• Management maintains a target of around 50% sales growth for 2024, higher capacity utilization, and positive EBITDA by year-end.

• Supply chain challenges in the pet segment expected to be resolved by September 2024, with a return to double-digit growth for Brilliant™ in 2025.