Hofseth BioCare (HBC) Q2 2025 earnings summary

Executive summary

• Q2 2025 was a transitional quarter with lower revenues but significant gross margin expansion to 46% from 34% year-over-year, reflecting a strategic shift toward higher-value human and pet health products.

• Operational EBITDA turned positive at NOK 1.3 million, up from NOK -2.5 million in Q2 2024, despite one-time restructuring charges.

• Human B2B segment saw 180% revenue growth year-over-year, driven by strong demand in Europe, China, and Southeast Asia, and a major global product launch.

• Consumer and Pet Health (B2C) revenues were flat, but net profitability improved by 10%, with growth expected to accelerate in H2 as supply constraints ease.

• R&D pipeline advanced with key studies in bone, joint, cognitive, and oncology health, and new publications and awards for flagship products.

Financial highlights

• Q2 2025 operating revenue was NOK 68.4 million, down from NOK 80.4 million in Q2 2024; H1 2025 revenue was NOK 129.3 million, nearly flat year-over-year.

• Gross margin rose to 46% from 34% in Q2 2024, reflecting a shift away from commodity sales.

• EBITDA was NOK -5.4 million, but adjusted Operational EBITDA was NOK 1.3 million, excluding NOK 3.0 million in restructuring and other non-recurring costs.

• EBIT for Q2 was NOK -14.9 million (Q2 2024: NOK -11.6 million); net financial items worsened to NOK -10.1 million due to new loans.

• Cash flow from operations was negative NOK 34.2 million, mainly due to increased inventory and changes in receivables/payables.

• Cash and cash equivalents at quarter-end were NOK 68.0 million, with total liquidity (including credit lines) at NOK 76.5 million.

• Equity ratio at group level dropped to 0.1% (Q2 2024: 35.7%), but parent company Covenant Equity Ratio remained compliant at 29.4%.

Outlook and guidance

• H2 2025 is expected to deliver over 20% revenue growth in B2C, with supply chain constraints anticipated to be fully resolved by Q4.

• Softgels business forecasted to grow over 50% in the next 12 months as new customer listings and supply improvements take effect.

• Continued focus on margin expansion, operational discipline, and science-led innovation to drive long-term value creation.