Neptune profits rise on krill oil success
The Canadian firm yesterday reported a 45 percent increase in revenue for the three months ended May 31, 2010 compared to the same period last year. This boosted revenue to $4.2m for the period.
According to Neptune’s director of finance, Xavier Harland, the improved results were largely due to an investment in the firm’s manufacturing plant last year, which boosted production performance. However, the results also reflect an increased uptake of krill oil as a source of omega-3, he said.
“Neptune krill oil has become well recognized in the industry, and we’re seeing a lot of companies moving to krill oil from fish oil. It usually involves companies adding krill to their product lines rather than replacing fish oil, but it’s a sign that krill oil is making a name for itself in the market,” he told NutraIngredients-USA.com.
Changing krill market dynamics
Neptune president and chief executive officer, Henri Harland, told NutraIngredients-USA.com recently that improvements in krill harvesting and processing methods were putting downward pressure on pricing and margins.
“More and more this segment will see competition on price – which hasn’t always been the case,” he said. “This is significant because the benefits are being redistributed to the customer. We are getting closer to the fish oil price.”
Neptune’s krill oil makes up almost all (some 99 percent) of sales in its nutraceutical segment. In the first quarter this year, the segment brought in just over $4.1m, again a 45 percent increase on last year. Earnings from the nutraceutical business for the quarter were $886,000 for the quarter, compared to a net loss of $1.6m last year.
The nutraceutical segment makes up 95 percent of the company’s overall revenue, with the remaining 5 percent coming from a partnership related to a contract research product for a medical food application.