Neptune makes progress on revenue front as company transition continues

15-Jun-2020 - Last updated on 15-Jun-2020 at 15:33 GMT

Neptune Wellness Solutions has invested in increasing its hemp processing capabilities. In the short term some of this capacity has been used to produce hand sanitizer during the pandemic crisis. Neptune Wellness Solutions photo.

Related tags CBD and Hemp Krill oil

Neptune Wellness Solutions reported a 21% rise in full year earnings. The Canadian company took in $21.7 million in its most recent fiscal year, compared to $17.9 million for the year previously.

Neptune, formerly known as Neptune Technologies and Bioressources, was a pioneer of krill oil as a dietary ingredient. After selling its bulk krill oil business to competitor Aker BioMarine, Neptune has concentrated hemp ingredient processing, turnkey product development solutions for clients and a new line of its own finished goods.

In its recent year end earnings report, Neptune said its revenues for reporting period ending March 31 were up 68% year-over-year in the fourth quarter.

Ongoing company transition

Neptune has transitioned its facility in Sherbooke, ON to hemp extraction. In addition the company has purchased a hemp processing facility in North Carolina for a price that was $18 million up front but could eventually hit $150 million over time in a combination of cash and shares depending on hitting certain EBIDTA targets over the next three years.

Neptune has also invested in the launch of finished goods brands. The company announced earlier this year the launch of a line omega-3 products based on krill oil under the Ocean Remedies brand name. It also announced a partnership with noted zoologist and conservationist Dr Jane Goodall to launch a line of products branded as Forest Remedies. These combine hemp oils with essential oils. The line includes ingestible and topical products. The company says a portion of each sale will be set aside to support Dr Goodall’s conservation initiatives.

The company has also revamped the executive suite. In the past few months the company has brought on a new chief operating officer, David Mayers, and has named Toni Rinow, PhD as the new chief financial officer. Rinow also worked at the company in the late 2000s.

Steep loss

The investments Neptune has made in capacity additions at the Sherbrooke plant, the North Carolina acquisition and product development mean the company continues to report losses. Neptune reported a loss of $29.8 million in the fourth quarter.

"We made significant progress in the ongoing transformation of Neptune to a diversified and fully integrated health and wellness company during the fourth quarter and throughout fiscal 2020. Neptune is a very different company than it was just one year ago,” said CEO Michael Cammarata.

“We have made investments to expand capacity, which is now operational, to launch new brands, to innovate new products with the marketing and sales support to drive distribution and sales. While these investments have negatively impacted near-term profitability, we have built the platform to drive accelerated growth and leverage these investments,” Rinow said.