Neptune sees increase in sales as NKO gains recognition
word about Neptune Krill Oil and an internal reorganisation are
paying off, as the Canadian manufacturer has reported a significant
increase in sales and a decrease in operating loss for the second
quarter of 2007.
Neptune Krill Oil (NKO), a lipid derived from the planktonic family of crustacean, is rich in omega-3 as well as phospholipids and antioxidants. It was originally launched at the end of 2003 for the North American supplements market, where it has established a strong presence.
For the quarter ended November 30 2006, Neptune reported a net loss from continuing operations of C$449,000 or $0.013 per share, compared to $453,000 or $0.018 per share for the prior year period.
EBITDA increased by 123 percent to $546,000 compared to $245,000 during the second quarter of 2005, and operating revenues grew by 44 percent over the same period to reach $1.9m.
"It's just a matter of the product being more known," Neptune vice president sales and marketing, Donald Allard, told NutraIngredients-USA. "Now, for the past one and half years we have started moving in Europe and Asia."
In particular, the company has been eyeing the European functional foods market. It expects NKO to get novel foods approval in Europe this spring, according to Allard. He said Neptune has alligned itself with significant clients recently, though he would not expand on this for NutraIngredients-USA.
Neptune's branded NKO is said to be different from other products marketed as krill oil. The company uses only a breed of Antarctic krill and a patented extraction process to manufacture the ingredient.
"We are not adding or removing anything," said Allard. "We're maintaining the integrity of naturally occurring compounds."
The company also attributes internal reorganization for boosting its margins and efficiency this past quarter.
"The reorganization of our sales and marketing department is starting to pay off," said André Godin, vice president administration and finance for Neptune. "Neptune has realized its best EBITDA quarter and second best sales quarter to date."
"We are very pleased with Neptune's overall performance even though the existing stock option plan in conjunction with the significant share price increase over the six months period ending November 30, 2006 affected the bottom line without fortunately any impact on the cash flow," said Godin.
Neptune stocks have risen in value and in November the company closed a $4.5m private placement designed to fund new clinical programs involving the cognitive benefits of NKO. Allard would not reveal what the company's exact projects in this area are.
