Saga Furs (SAGCV) H1 2024 earnings summary

Executive summary

• Mink pelt prices rose and demand remained strong, but overall auction sales fell due to lower supply and weak demand for fox pelts.

• Auction sales value dropped 26% year-over-year to €110 million; revenue fell 28% to €14.3 million.

• Operating result turned to a €1.3 million loss (vs. €0.1 million profit last year); pre-tax profit was €0.4 million (vs. €1.9 million).

• Nearly 90% of mink pelts sold at the March auction, with average prices up 25% year-over-year.

• Company continues to focus on traceability and sustainability, with all pelts certified and some using Saga Trac technology.

Financial highlights

• Auction sales value: €110.3 million (down from €149.4 million year-over-year).

• Revenue: €14.3 million (down from €19.8 million year-over-year).

• Operating costs: €17.9 million (down from €20.5 million).

• Operating result: -€1.3 million (vs. €0.1 million profit year-over-year).

• Net financial income: €1.7 million (vs. €1.8 million).

• Pre-tax profit: €0.4 million (vs. €1.9 million).

• EPS: €0.05 (vs. €0.43).

• ROE: 0.2% (vs. 1.8%).

• ROI: 0.8% (vs. 2.2%).

• Solid equity ratio: 78.2% (up from 72.7%).

Outlook and guidance

• Full-year auction sales and revenue expected to fall below previous year (€352 million and €47 million, respectively).

• Full-year result highly dependent on September 2024 auction, with outcome difficult to predict.

• Global mink pelt supply continues to shrink, supporting higher prices; fox pelt supply to decrease due to avian flu.

• Market outlook in China is cautiously positive, but consumer demand remains tentative.