Thursday, 21 June 2012

Good News From Asia For Neptune’s Sales – Is Europe Next?


Neptune Technologies & Bioressources
TSX: NTB - NASDAQ: NEPT
Basic Shares: 48.2 million
Fully diluted: 53.9 million
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It’s always a bonus to drop good news on the day of your AGM and Neptune did just that with a teaser announcement that it had “new and firm” Asian orders amounting to $25 million (USD) for calendar 2013.

There are a number of things people should take away from this news release.
  •  The Asian market is going to play a major role in the growth of Neptune’s krill oil (NKO) sales,
  • Commercial discussions at the Vitafoods Geneva conference in May 2012, are the catalyst for accelerating expansion at NTB’s Sherbrooke, Quebec plant.

The news release noted accelerating the 3rd Phase expansion program, which was originally scheduled for 2014. In the May 31st management conference call, it was stated that the 2nd phase will increase plant capacity to 500,000kg/yr that could potentially generate annual sales of $80million (USD).

We’ve asked management if the Asian orders are associated with its Chinese joint venture partner – SKFC, and also for clarification on whether or not these are coming from new customers.

We’ve been asked if part of the $25 million in orders is a direct result of the exhibition in Europe mentioned on the company’s May 31st conference call. At that time management referenced “potential and blanket orders for more than 150,000 kg for the year to come.”  

We’ll issue a follow-up commentary once we hear.

To view the full news release, please click here.