Neptune's strong sales helped cushion blow of plant explosion

22-May-2013 - Last updated on 23-May-2013 at 15:02 GMT

Neptune Technologies and Bioressources has released its year end results for fiscal year 2013 which show that strong sales earlier in the year helped cushion the blow dealt to the company’s finances by the explosion and fire that devastated the company’s production facility in Sherbrooke, Québec on Nov. 8, 2012.

For the year ended Feb. 28, 2013, the company, one of the four major suppliers of krill oil for human nutrition applications, reported nutraceutical revenues had increased by 32% to $25.2 million, even though production ceased at the time of the fire and remains suspended. That was an increase over the $19.1 million the company recorded in 2012. Adjusted EBITDA showed a loss of just under $1 million, compared to a positive $2.7 million in 2012. Net loss in 2013 ws $12.8 million, compared to a profit of $2.4 million in 2012.

Neptune attributed the year over year increase in strong sales in the American, European and Australian markets prior to the explosion. The net loss for fiscal year 2013 is mainly attributable write-offs related to the that event, which have been partly offset by insurance payments.

Overall, including the company’s pharmaceutical and medical food business, net losses in 2013 were $20 million, compared with losses of $4.6 million in 2012.

“Our quick reaction to the incident has enabled us to effectively manage through a difficult period and put in motion key initiatives to ensure we are positioned for a strong recovery and continued market momentum,” said Henri Harland, president and CEO of Neptune. “As well, our strong sales and marketing focus has allowed us to maintain the Neptune name and brand equity in the marketplace.”

Plant to resume production

Harland detailed the ongoing steps Neptune is taking to restart production in Sherbrooke. At the time of the fire, an expansion facility was almost complete. This facility was not heavily damaged in the incident but will require the installation of new equipment to form the basis of a rebuilt production facility. Neptune announced on Wednesday that it has received all of the necessary government permits to begin reconstruction of the plant, and hopes to finish by the end of the current fiscal year in February, 2014. The cost of the reconstruction project has risen as the requirements of the new facility have become more clear and now stands at about $30 million from the $21 million estimated previously. Neptune said it expects most of this cost to be covered by insurance.

Neptune also released more details of the process by which it will form a relationship with a third party oil processor to supply some supply flexibility and security in the future. The company said it has had intensive discussions with three potential partners and expects to make a decision in the near future.