Earnings call transcript: Vistin Pharma Q2 2025 revenue climbs, stock rises

Vistin Pharma, a leading producer of metformin API, reported an 11% increase in Q2 2025 revenue, reaching NOK 118 million. The company also saw its EBITDA rise by the same percentage to NOK 30 million, reflecting strong operational performance. According to InvestingPro data, the company maintains an impressive gross margin of 66.73% and has achieved a robust return on equity of 24%. Following the earnings announcement, Vistin Pharma’s stock price increased by 4.56% to NOK 25.2, as investors reacted positively to the company’s robust financial metrics and strategic initiatives.

Key Takeaways

• Vistin Pharma’s Q2 revenue grew by 11% year-over-year.
• The company maintains a gross margin consistently above 60%.
• Stock price rose by 4.56% post-earnings announcement.
• The company is expanding its production capacity to 7,000 metric tons annually.
• Vistin Pharma has a strategic focus on sustainability and renewable energy.

Company Performance

Vistin Pharma demonstrated strong performance in Q2 2025, with revenue and EBITDA both increasing by 11% compared to the same period last year. The company continues to benefit from its position in the growing diabetes treatment market. With a strategic focus on increasing production capacity and maintaining a significant market share, Vistin Pharma is well-positioned for future growth.

Financial Highlights

• Revenue: NOK 118 million (11% increase from Q2 2024)
• EBITDA: NOK 30 million (11% increase from Q2 2024)
• Gross Margin: Consistently above 60%
• Net Profit: Approximately NOK 18.5 million
• Dividend: NOK 1.25 per share, totaling NOK 55 million

Market Reaction

Following the earnings release, Vistin Pharma’s stock price increased by 4.56%, closing at NOK 25.2. This movement reflects investor confidence in the company’s ongoing growth and strategic initiatives, including capacity expansion and sustainability projects. InvestingPro analysis indicates the stock trades at an attractive P/E ratio of 14.44x and offers a significant dividend yield of 7.26%. The stock demonstrates low volatility with a beta of 0.71, making it potentially appealing for income-focused investors. The stock remains within its 52-week range, with a high of NOK 28.8 and a low of NOK 21.5.

Outlook & Guidance

Looking forward, Vistin Pharma aims to ramp up its production capacity to 7,000 metric tons annually. The company expects stable raw material prices throughout 2025 and remains vigilant about potential tariff impacts in the US. InvestingPro has identified several positive indicators for the company, including strong free cash flow yield and excellent financial health with an overall score of 3.63 (GREAT). With a current ratio of 2.69 and minimal debt, Vistin Pharma appears well-positioned to fund its growth initiatives. The company is optimistic about both organic growth and potential mergers and acquisitions. For deeper insights into Vistin Pharma’s growth potential and comprehensive analysis, investors can access the detailed Pro Research Report available on InvestingPro.

Executive Commentary

CEO Magnus Tolerzerg emphasized the significance of the diabetes market, stating, "Diabetes is really one of the largest health emergencies in the twenty-first century." CFO Alexander Carlsen highlighted the company’s strategic hedging, noting, "We have hedged a good portion of our sales for the rest of 2025 and 2026."

Risks and Challenges

• Supply Chain: Potential delays in freight lead times from Asia to Europe could impact operations.
• Tariffs: Monitoring the potential effects of US tariffs on operations.
• Capacity Expansion: Achieving the last 20% of capacity expansion requires technical optimization.

Vistin Pharma continues to navigate these challenges while maintaining a strong market position and focusing on strategic growth initiatives.

Full transcript - Vistin Pharma ASA (VISTN) Q2 2025:

Conference Operator: Good day, and thank you for standing by. Welcome to the Vistin Pharma Quarterly Reports Q2 twenty twenty five Conference Call. At this time, all participants are in a listen only mode. After the speakers’ presentation, there will be a question and answer session. Please be advised that today’s conference is being recorded.

I would now like to hand the conference over to your speaker today, Magnus Stolhauk, CEO. Please go ahead.

Magnus Tolerzerg, CEO, Vistin Pharma: Thank you very much, and welcome all to this second quarter and the year to date presentation of Vistin Falma. My name is Magnus Tolerzerg, CEO of the company and with me today I have our CFO, Mr. Alexander Carlsen. I will now go through the highlights. The revenue in the second quarter ended at 118,000,000 compared to NOK 106,000,000 in the second quarter last year, an increase of 11.

The increased revenue was driven by 17% higher sales volumes compared to same quarter last year. The year to date revenue ended at million compared to NOK210 million year to date last year, an increase of 11%. The EBITDA at the second quarter ended at million compared to NOK27 million in the second quarter twenty twenty four, an increase of 11%. The EBITDA was positively affected by increased sales volumes and our continuous focus on cost improvements. EBITDA year to date ended at 60,000,000 compared to 48,000,000 year to date 2024, an increase of 27%.

Approximately 1,500 metric tons was produced in the second quarter. The April was influenced by a gradual startup after the planned reactor replacements on line one. This reactor was nearly ten years old and needed the replacements after wear and tear. So that was a planned replacement. We do see some still volatile freight lead times from Asia to Europe of raw materials and some bottlenecks for on offloading in the European harbors.

However, no impacts on production, since we have safety stock of critical raw materials. And currently we see no changes in demand from customers after The US tariff discussions. Regarding US, less than 5% of our sales is to US directly. We had a net debt of million as of June and an ordinary cash dividend of total NOK1.25 per share was paid in June corresponding to NOK55 million. Vistin, we are a pure play metformin company, supporting patients worldwide in the growing markets.

I mean, is really one of the largest health emergencies in the twenty first century. And the metformin is the gold standard treatment of type two diabetes. And therefore we like to say that Vistin Pharma has a good growth opportunity, being a leading global producer of premium quality metformin. The market demand for metformin is expected to grow between four to 6% annually on a compound annual growth rate, according to the International Diabetes Federation. And today we still have a market share of approximately 10%.

And we also continue to have 10% when the new capacity expansion is fully utilized. And the reason for that is we are growing in a growing market. So the underlying growth and demand is increasing. This slide shows the latest numbers and estimates from the International Diabetes Federation. These are updated in 2025.

About five ninety million adults in the world today is living with diabetes. This is expected to increase by forty five percent within 02/1950. And just for some information out of the five ninety million, approximately ten percent of these patients are diabetes type one and ninety percent are type two diabetes where typically metformin is used to treat the type two diabetes. You can also see an expected increase in all parts of the world in the coming years. Some key diabetes facts.

As mentioned, diabetes is really a global emergency. An estimated five eighty nine million adults in the age of twenty to seventy nine are living with diabetes. This represents eleven percent of the world’s population in this age group. And the total number of adults living with diabetes is predicted to rise to around eight fifty million, so up to thirteen percent of the adult population by 02/1950. And also an estimated two fifty million adults is living with diabetes today and are aware that they have the condition.

More than three million people died as a result of diabetes in 2024. This corresponds to more than nine percent of the global death from all causes. And more than 1,000,000,000,000 US dollars was spent on the indication diabetes in 2024, representing almost twelve percent of the global health expenditure. Also in addition to this, an additional six thirty five million adults in the age of 20 to 79 years old are living with something called impaired glucose tolerance, which is twelve percent of the population. This is typically a precondition of diabetes before you develop diabetes.

And also here, metformin is normally used to treat this condition. In Eastern Pharma, have sales all over the world, all the way from Japan in the East to LatAm and US in the West. However, our largest sales volume are going to Europe, where typically our customers being large and medium sized reputable pharmaceutical companies produce the finished product with our API and then sell all over the world. So today we have this in API material used in more than 100 countries in the world in drug products. In this thing, we’ve had a long and successful track record, something we are proud of.

This slide shows the revenue development past fifteen years. And in 2023, we can see the investment in our second manufacturing line started to materializing into sales. So with that, I think I will hand over to our CFO, Mr. Alexander Karsten, who will bring us through the financial details.

Alexander Carlsen, CFO, Vistin Pharma: Thank you, Magnus. So let’s have a more deep dive into the figures. Starting here with the sales volume, we can see the historic on the graph to the left side there. In the second quarter this year, we had an all time high sales volume of fourteen sixty tons, a nice increase compared to twelve fifty tons same quarter last year. Year to date or the 2025, we’re close to 2,900 tons and then around 400 tons increase from around 2,500 tons in the 2024 or a 15% increase.

Looking at the revenue, million increased from around NOK106 million same quarter last year. And as Magnus mentioned, it is mainly driven that we have had some good production months meaning that we have more volumes available sales and then materialize this volume to revenue and sold to customers. Current sales prices is reflecting the raw material and freight costs as of today. We’ve seen rather stable raw material prices in 2025 compared to 2023 and ’24 where we saw a lot of volatile raw material prices. And total revenue for the first half $233,000,000 compared to 02/10 last year, again, driven by a nice sales increase of 15%.

Looking at the gross margin, I would say we continue to deliver a very solid gross margin, well above our long term target of 60%. We have good volume growth now gives a favorable economic scale in purchasing and also more stable raw material prices helps on the gross margin. When it comes to the EBCA, very satisfied with another quarter with plus 30,000,000 in EBITDA. We had 27 in the same quarter last year, so 11% increase. And as Magnus mentioned, the EBITDA was positively affected by the increased sales volume and the cost focus as we always have.

For example, now we’re really starting to see or see really seen a big benefit of the water recycling project. Where we now in the second quarter have basically recycled 80% of our water. Margin in the second quarter was 26%. Again, very strong and being an API producer, I think is also in addition to the cost focus represent good commercial execution from the salespeople. When comparing the EBITDA this quarter compared to same quarter last year, the net effect from the USD and euro is insignificant for the quarter.

And year to date an EBITDA of 16,000,000 compared to 48,000,000 last year. So again, here a very, very nice growth. Looking at some of the key figures in the income statement, I think we’ve through some of these going below the EBITDA, slightly increase in depreciation compared to same quarter last year. Just capitalizes some more investment, for example, the recycling project in the second quarter. But I expect the depreciation to be rather stable for the rest of the year.

Earnings before taxes ended at close to 25,000,000 compared to close to 22,000,000 last year. For the net finance, we had an expense in this quarter compared to gain in the same quarter last year and this is just mainly related to market to market value of FX hedging contracts. We have hedged a good portion of our sales or expected sales for the rest of 2025 and 2026 to euro is better than we see now in the spot market. Profits before loss close to 24,000,000 versus 24.5 last year, while net profit for the period came in at close to 18.5 compared to 19,000,000 for the same quarter last year. Looking a bit more on the balance sheet side for the assets, non current assets are rather stable on the fixed asset side.

As you see, we have fully utilized the tax assets, deferred tax assets. So that’s no more on the balance sheet. When it comes to the current assets, as we have commented in the report, there are some working capital increases in the quarter, mainly driven by more inventory. As Magnus mentioned, are you see a lot of volatility lead times. So we have decided and plan to increase both the raw materials and the finished goods slightly from previous to have some more safety stocks.

That’s just to make sure that we can deliver in full on time to our customers when they want materials. Receivables slightly higher, again, increased sales, driving more receivables, but we also see that some of Asian customers will not pay before they receive their goods in Asia. And the lead times has gone from around seven, eight weeks to around twelve to thirteen weeks saving time. So slightly increase also driven by the lead time on the sale. Total assets around $420,000,000 compared to around 400 last year.

Looking at equity and liabilities, total equity, rather stable, Some decrease in share premium, driven by the dividend payments done in June. Long term, liabilities Only change there is the tax liability, as we know are in a tax position, not the whole amount is actually taxes payable. That’s a part of it. And for the short term liabilities, no big changes, I would say compared to same quarter last year. For the other current liabilities, around 50% of that balance is raw materials, see as we are taking over responsibility, but not yet because we don’t pay until it’s received at our harbor.

I mentioned the working capital which has increased. And also Mark mentioned that we have some net debt as of end June mainly driven by the dividend payout and also some slightly increase in working capital. We also have credit facilities needed or available if needed. So with that, I think I am mainly done with the figures Magnus and I give the word back to you.

Magnus Tolerzerg, CEO, Vistin Pharma: Yeah, thank you, Alexander. I will now go through a summary of the report and presentation. We have had another strong quarter with an EBITDA of 30,000,000 in the second quarter twenty twenty five. We had a sales volume increase of 17% compared to the same quarter last year and 15% increase in sales volume year to date compared to last year. We have an increased operational performance with a higher run rate in this quarter compared to last quarter last year, some more units per time, goes together with our ramp up projects and our continued focus on costs and good commercial execution, as Alexander mentioned, is showing positive effect year to date.

Currently, we do not see any changes in demand from customers after The US tariff announcements. However, of course, we are continuously monitoring the situation for potential supply chain knock on effects. The metformin market is expected to continue to grow with a four to 6% compound annual growth rate. So we see an attractive growth potential as the remaining manufacturing capacity becomes fully available and optimized. Also worth mentioning that our long term renewable energy supply agreement signed with Stockcroft until 2032 provides us a very predictable power prices irrespective of market volatility and secures 100% green renewable hydropower long term.

And we believe that vSTN is strategically well positioned as many European clients and also Asian clients prefer high quality supplies and in Europe near shore production and an attractive ESG profile. And an ordinary cash dividend of NOK1.25 per share was paid out to shareholders in June. So with that, I think we’re done with the second quarter and the year to date presentation and can open up for questions.

Conference Operator: Thank you.

Magnus Tolerzerg, CEO, Vistin Pharma: Yep, there’s a question here. If we could elaborate a bit more about our strategic plans with our 15% stake in CF Pharma. So last year we purchased minority posts in CF Pharma, which we acquired to modest price. This gives us, I would say an access to management and an ability to monitor the business. So we are currently evaluating our options, looking into some projects.

That’s the status there. Said that we are opportunistic when it comes to growth. I mean, growth for Visteon might also be organic or it could be via M and A activities. There’s another question here about what is limiting the growth in the near future, is the production capacity or the demand for products or something else is the question. Well, we are steadily ramping up our manufacturing capacity.

If you take the manufacturing volume of the quarter and multiply by four, you have an approximate annual volume and we are selling volume as we ramp up. And our target is to get to 7,000 metric tons of production. And typically when you do technical big ramp ups like this, the Pareto rule is also valid where let’s say 80% is normally the easiest part and then the last 20 is more tricky where you need to have technical tweaking and optimizations to get to the target. But we are, let’s say in a balanced way, ramping up the volumes and also the sales. Demand in the market out there is good.

Alexander Carlsen, CFO, Vistin Pharma: And I think that was all the question for now.

Magnus Tolerzerg, CEO, Vistin Pharma: Yes.

Alexander Carlsen, CFO, Vistin Pharma: Then I think we can close the call.

Conference Operator: Thank you. This concludes today’s conference call. Thank you for participating. You may now disconnect.

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