Nutritek Group (Nutrinvestholding: NTRI) released Friday its operating results for FY 2007 ended March 21, 2008. In line with the company's announcement, the Group's revenue rose by 4.7% y-o-y. Despite the sale of dairy assets in 2007, the company managed to increase its revenue, primarily due to a 37.5% growth in baby food sales in US dollar terms.
Table. Nutrinvestholding: Key Financials FY 2007, USD mn
| | April 2006 – March 2007 | April 2007 – March 2008 | Change y-o-y |
|---|
| Revenue | 378.9 | 396.9 | 4.7% |
| Gross profit | 72.5 | 82.0 | 13.1% |
| Gross margin | 19.1% | 20.7% | |
| Operating profit | 39.3 | 44.8 | 14.0% |
| Operating margin | 10.4% | 11.3% | |
| EBITDA | 68.5 | 75.8 | 10.7% |
| EBITDA margin | 18.1% | 19.1% | |
| Net profit | 22.4 | 26.0 | 15.9% |
| Net margin | 5.9% | 6.5% | |
Source: company data, Finam estimates
We are generally upbeat on the company's FY 2007 results. However, we believe that the published results do not properly reflect the company's income due to the sale of the company's dairy assets. Particularly, in 4Q 2007, the share of the dairy segment in the company's total sales structure did not exceed 10%, while at the year-end it amounted to more than 48%. Nonetheless, we believe that the focus on the more dynamically growing and profitable baby-food sector may boost the company's financials in the mid-term. Among the positive factors, we also point out an increase in Nutritek's stake in New Zealand Dairies Limited from 5.6% to 51.5% in June 2008, which should reinforce the company's position on the international markets.
In line with our estimates, the fair value of Nutrinvestholding is USD 39.4 per share, an upside of more than 33% on the current market valuation.
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