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Introduction & Market Context
Aker BioMarine (OB:AKBM) presented its first quarter 2025 results on April 30, showcasing continued revenue growth and significant improvement in profitability metrics. The Norwegian biotech company, which specializes in krill-derived products for human and animal nutrition, reported progress across its key business segments while highlighting market expansion opportunities in the $4.7 billion global omega-3 market.
The company’s stock closed at 49.95 NOK on April 29, 2025, showing a modest 0.2% increase on the day. The share price remains closer to its 52-week low of 42.3 NOK than its high of 109.8 NOK, suggesting investors remain cautious despite the operational improvements.
Quarterly Performance Highlights
Aker BioMarine reported total revenues of USD 50.8 million for Q1 2025, representing a 5% year-over-year increase. More impressively, adjusted EBITDA reached USD 9.0 million, surging 59% compared to the same period last year. This performance continues a positive trend observed over the past five quarters.
As shown in the following chart of quarterly revenue and adjusted EBITDA:
The Human Health Ingredients (HHI) segment emerged as the standout performer, with revenues of USD 26.0 million (up 16% year-over-year) and adjusted EBITDA of USD 11.3 million (up 36%). This segment benefited from 15% growth in krill oil sales, driven primarily by volume increases and strong performance in China, Europe, and South America.
The detailed performance of the Human Health Ingredients segment is illustrated here:
Consumer Health Products generated revenues of USD 27.1 million, a more modest 4% increase year-over-year. The company noted this segment has returned to growth following the completion of inventory adjustments, with sales now tracking underlying demand. Recent retailer wins include BJ’s Wholesale Club (NYSE:BJ) and Whole Foods, which should support continued momentum in a supplement market growing at approximately 3% annually.
The Consumer Health Products segment performance is shown below:
The Emerging Business segment reported stable revenues of USD 2.1 million and showed improvement in adjusted EBITDA, reducing its loss to USD 0.4 million from USD 0.9 million in Q1 2024. The company mentioned that out-of-store sales for major US retailers increased 3% quarter-on-quarter.
Detailed Financial Analysis
Despite the operational improvements, Aker BioMarine still recorded a net loss of USD 3.1 million for Q1 2025, though this represents a significant improvement from the USD 11.9 million loss in Q1 2024. The loss includes USD 1.1 million from discontinued operations.
The company’s comprehensive profit and loss statement reveals the following:
Working capital increased to USD 119 million in Q1 2025 from USD 108 million at the end of 2024, primarily due to higher inventory in the Consumer Health Products segment and decreased payables related to Feed Ingredients transaction costs.
Interest-bearing debt stood at USD 173 million, with net interest-bearing debt of USD 157 million, resulting in a net interest-bearing debt to adjusted EBITDA ratio of 4.8x. This leverage ratio remains relatively high but has been improving as EBITDA increases.
The company’s debt position is illustrated in the following chart:
Cash flow from operations was negative USD 11.1 million for the quarter. Investments decreased to USD 2.4 million in Q1 2025 compared to USD 3.1 million in the same period last year, with the company guiding for full-year maintenance and development capital expenditures of USD 6-8 million.
The balance sheet shows total assets of USD 389.6 million, with equity of USD 170.6 million, representing an equity ratio of approximately 44%:
Strategic Initiatives
Aker BioMarine highlighted significant market opportunities for krill-based products in the omega-3 space. The company noted that successful premium ingredients typically achieve around 20% market share, suggesting substantial growth potential from current penetration levels.
The market opportunity is visualized in this regional breakdown:
A key challenge identified is consumer awareness, with 71% of consumers in China and 53% globally unaware of krill as an omega-3 source. Increasing awareness represents a strategic priority for driving future growth.
The company also announced the initiation of a human clinical trial for Lysoveta, marking an important milestone in its commercialization and supporting the goal of establishing the first brain-related health claims for this product.
For the Emerging Business segment, management indicated an ongoing sales process for Understory with "several interested leads," consistent with their strategy to bring this division to cash break-even or seek transactions.
Forward-Looking Statements
Looking ahead, Aker BioMarine provided a positive outlook across its business segments. The company expects continued growth and improved profits in Human Health Ingredients, modest growth in Consumer Health Products, and progress toward cash break-even for Emerging Businesses.
The company has established a new underlying corporate cost level of USD 10-12 million, down from approximately USD 19 million before recent transactions, reflecting ongoing efforts to streamline operations and improve profitability.
Management noted that current evaluations indicate limited impact from tariffs on Human Health Ingredients financials, though some effect is expected on Nutra meal imported to the US and krill oil exported directly to China.
With sequential improvements in adjusted EBITDA over the past five quarters and strategic initiatives underway to expand market awareness and penetration, Aker BioMarine appears positioned to continue its trajectory toward sustainable profitability, though the high debt levels and ongoing losses suggest challenges remain.
Full presentation:
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