Good day, and thank you for standing by. Welcome to the Vistin Pharma Quarterly Report, Q4 2023 conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to "press star one one" on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, "please press star one one" again. Alternatively, you may submit your question via the webcast. Please be advised that today's conference is being recorded. I will now like to hand the conference over to your speaker today, Magnus Tolleshaug. Please go ahead.
Thank you, and, welcome everyone to this, Q4 and the preliminary 2023 results presentation of Vistin Pharma. This presentation will be held by, myself, Magnus Tolleshaug, the, CEO of the company, and also Alexander Karlsen, our CFO of the company. I will now go through the, financial highlights. We are happy to announce that Vistin Pharma has had another strong quarter. The, revenue of the fourth quarter ended at NOK 111 million versus NOK 99 million in Q4 2022, which represents a 12% increase. The increased volume from the new production line compared to the same quarter last year, has resulted in more volumes available for sale.
The full 2023 revenue ended at a record high NOK 438 million, compared to NOK 305 million last year, so a 44% increase. The strong revenue increase in 2023 reflects a year with two production lines running, although the new line is still in the ramp-up phase. The EBITDA of the fourth quarter ended at NOK 25 million versus NOK 10 million in the fourth quarter of 2022. The EBITDA was positively affected by increased sales volume, a stronger euro versus NOK, and partly offset by a stronger US dollar versus Norwegian kroner. There was a bonus accrual of NOK 2.9 million booked in the quarter, compared to NOK 0.5 million in the fourth quarter, 2022.
We are happy to see a positive economies of scale effects as the Metformin Expansion Project volume continue to ramp up. The full 2023 EBITDA ended at all-time high, NOK 86 million, compared to NOK 6 million last year. The net profit was positively affected with approximately NOK 7 million in the quarter by fair value of future FX cash flow hedging contracts. So this is unrealized gain, no cash effects in the quarter. We have strong balance sheets with an equity ratio of 81% and a net cash of NOK 26 million as of 31st of December 2023. Additional dividend of NOK 0.75 per share was approved and paid in January 2024 to our shareholders.
The board of directors will propose for the annual general meeting an ordinary dividend of total NOK 1.0 per share, to be paid partly with NOK 0.5 in June and another NOK 0.5 in November. We are a pure play metformin company, as we with a bright outlook, as we like to say. Diabetes is really one of the largest health emergencies in the 21st century, and we deliver metformin as a medication, and metformin is the gold standard treatment of type 2 diabetes.
The reason for this is it's a well-known drug for decades, it has a good efficacy and a favorable safety profile, and it is a low treatment cost of for the patients, and especially relevant for low and middle-income countries, where also the growth of type 2 diabetes is very high. So as we like to say, we have a bright outlook for Vistin Pharma. We are a leading global producer of premium quality metformin. If we look at the global demand for metformin, it's expected to continue to grow by a compound annual growth rate of between 5%-6% on an annual basis. And Vistin Pharma, we have a global market share of approximately 10%. Type 2 diabetes is really a global emergency.
The total number of diabetes patients is expected to rise to 783 million people by 2045, so an increase of 46%. This slide shows figures from the International Diabetes Federation. We know that today, about 550 million people have diabetes, and around 90% of those cases are type 2 diabetes. More than 6 million people die of diabetes every year, and it's also estimated that around 250 million adults are still undiagnosed with type 2, who may be in need of treatment. From a global health expenditure perspective, about 11.5% of the global health expenditure is spent on diabetes, so it's really a global emergency. Graphs show our revenue in Vistin many years back.
As you can see, Vistin Pharma has had a long and successful track record. I think it is great to see our double capacity investment in 2022 is materializing in sales in 2023, and that we can start harvesting from the expansion benefits. So we are happy today to show a record high revenue for 2023. On that positive note, I would like to hand over to our CFO, Mr. Alexander Karlsen, to go through the financials.
Thank you, Magnus. We will start to have a look at the sales volume. Looking at the graph to the left, we can see an increase of sales volume from Q4 2022 to Q4 2023 of around 11%. The Q4 sales volume was however lower than the Q3, driven by a planned bi-annual maintenance stop, which gives less of volume available for sale in Q4. Having a look again on the graph to the right, the annual sales volume ended at around 5,000 tons in 2023, compared to around 3,500 tons in 2022, which equals 1,500 tons growth, 44% increase. Having a look at the revenue. Revenue increased by around 11% compared to the same quarter last year. However, currency neutral revenue is flat compared to that quarter.
That's driven by that the metformin prices are correlating with the global raw material prices, and the material prices has gone down during 2023. However, looking at the gross margin, we see a very positive effect from the previous quarters. That's also adjusted for effects, and the positive effect of the gross margin, driven by economies of scale, decreased raw material prices, and favorable effects. And as previously, we continue to have an ambition of a gross margin of above 60%. Having a look at the EBITDA, which came in at NOK 25 million , compared to around NOK 10 million in Q4 2022, which is a 150% increase. The EBITDA is positively affected by increased sales volume, competitive energy costs from the 10-year fixed price agreement with Statkraft, and also a net positive effect of FX.
As Magnus mentioned, a bonus accrual of NOK 2.9 million was booked in the fourth quarter, compared to NOK 0.5 million in Q4 2022. From an economic standpoint, we are very happy to see that we achieve the economies of scale within new production volume. Looking some more details in the income statement. For the Q4 2023, we've been through the revenue and EBITDA. Earnings before taxes came in at NOK 23.1 million. The depreciation was higher in Q4 this year, sorry, in Q4 2023, compared to Q4 2022, and that's mainly driven that we did not start to depreciate all the MEP investment before in 2023. Net finance income in Q4 2023 was driven by the NOK 7 million in unrealized gain on future FX hedging contracts.
Profit in the Q4 2023 ended at NOK 18 million. Please note that the tax cost in the P&L is not payable due to the deferred tax asset we have in the balance sheet. Having also a brief look at the 2023 preliminary numbers. Total revenue came in at around NOK 438 million, a 44% increase from 2022, driven by more volumes available for sale. EBITDA for 2023 came in at close to NOK 86 million, and the huge increase there is driven by volumes, economical scale, FX, and the Statkraft agreement for electricity. Earnings before taxes ended at around NOK 58.5 million. There's a big increase in depreciation from 2022 to 2023, and that's driven by the depreciation of the MEP investments.
There's a net finance expense in 2023 of around NOK 10 million, driven by realized loss on FX hedging contracts in the year. Net profit came in at around NOK 45.6 million. Again, the tax cost is not payable due to the deferred tax asset in the balance sheet. Moving on from the P&L to the balance sheet, having a look at the asset side first. The fixed assets of close to NOK 220 million is mainly equipment and machines at the plant in Kragerø. The deferred tax asset has decreased from last year, driven by generating positive results. So total non-current assets at year end 2023, around NOK 234.7 million. Inventory, similar value as last year.
However, this in end of 2023, we have more finished goods and less raw materials at hand, compared to end 2022, where we had more raw materials and less finished goods. As you probably, most of you know, there are limitations in transportation through the Suez Canal, which has significantly increased the freight lead times for all raw materials that's sent from Asia. However, we don't anticipate any impact now on the production, as we have sufficient local safety stock of the critical raw materials, either in-hand, physically, or at sea on the right side of the Suez Canal. But we are monitoring the situation closely. Looking at the cash, we had around NOK 26.2 million, compared to around NOK 1.4 million at end of 2022. That gives total assets of close to NOK 399 million as of end 2023.
Having a look at the equity and liabilities, total equity came in at around NOK 322.8 million, mainly driven by an increase in retained earnings, again, as we drive positive results. That is also translated to a strong equity ratio of 81%. On the non-current liabilities, down around NOK 4.4 million, driven by a decrease in the pension liability as of year-end. Looking at current liabilities, no net interest paying debt as of end December 2023. The total liabilities is around NOK 75.8 million as of year-end, compared to close to NOK 134 million as of year-end 2022. Main change, mainly driven by a down payment of the short-term debts. It's also worth mentioning that we have a credit facility available if needed.
That gives total equity and liabilities of close to NOK 399 million. I think I'm done with the details of the financials now, Magnus, and I'll hand the word back to you.
Yeah. Thank you, Alexander. I'd like to spend a minute to go through our strategic position and recap some highlights. We have the double capacity, double care metformin strategy. Vistin Pharma is a strategically positioned producer of two different metformin products. It's metformin HCl, which is the API, the powder, and the DC, the direct compressible granules. So we pre-process and sell to the pharmaceutical customers granules they can put directly on the tableting machine. We continuously enhance our capability to supply tailor-made products to our customers. We also always work on our cost of goods by investing in cost-efficient supply of raw materials and waste handling and lean principles. And we are strategically well positioned as many European clients prefer high-quality supplies, nearshore production, and a leading ESG profile.
We have an attractive growth potential with the new production line that we installed in 2022. As you have seen today, the sales volume has increased by 44% from 2022 to 2023, and the volume increase is expected to continue as we ramp up our capacity. We are a premium producer in a competitive market. We have typical sales to reputable international pharmaceutical companies. We have our state-of-the-art, fully automated manufacturing plant in Kragerø in Norway, and we are certified by all significant international regulatory bodies to be able to sell our drug globally. The metformin market is expected to continue to grow by a CAGR, compound annual growth rate, of 5%-6% annually. And as mentioned, diabetes is one of the largest health crisis of the 21st century.
Metformin is expected to maintain its position as the gold standard treatment of type 2 diabetes in the foreseeable future. If you look at the global demand, the additional demand of metformin HCl is by industry experts forecasted to grow by something like 23,000 metric tons to a total of 87,000 metric tons by 2028. So it's large volumes we're talking about. And with that, I think we are finished with the presentation and are and opening up for questions.
Thank you. As a reminder, to ask a question, "please press star one, one" on your telephone and wait for your name to be announced. To withdraw your question, "please press star one, one" again. That's star one and one, if you wish to ask a question. There are no phone questions at this time. I would like to hand over for any web questions.
Yeah, there is one question here. Whether we see any future effects in sales in regards to all those new weight-reducing products that has had such an increase in sales and volumes in the market? Yes, well, those new weight-reducing products are typically high-cost products, reducing weight, but also reducing type 2. But, I mean, metformin is, as mentioned, an old, very well-known drug with well-known side effects, with a very, very low treatment cost per patient per day, compared to those weight loss drugs. So we don't see any effects on sales because of those new drugs in the market.
Those are typically also very high cost for the patients, and if you look at the, as mentioned, on the low and middle-income countries in the world, where out-of-pocket expenditure is needed for your treatment, that's typical metformin, which is used in that matter so.
Then there's a question about the reduction in sales volume from Q3 to Q4. I think I mentioned part of that, that is due to the, we had a maintenance stop, which was planned, which we have biannually in October, which reduced the volumes available for sale. But it's also that, that our general lower activity in end Q4 as, the, our customers prepare for Christmas and, stops during year end. So last three weeks of the year, there are generally very limited shipments out from us. Then there's a question about the dividend, if that will also be a capital reduction as previous. And, I would say that that's the plan, but all the details will be revealed when we send the call for the AGM in April.
And then there's a question if the current OpEx base is capable of handling 7,000 metric ton volume. I think there are different, it's not one answer to that. Is that when it comes to the salary cost and the FTEs, I don't expect any significant increase to that going forward. I think our current staffing is sufficient to handle more production more than more sales. However, for example, electricity, waste, et cetera, is very closely linked to the volume. So if you have more volume, you also have more waste and more electricity use. We also, today, use or in 2023, used, drinking water to cool down our reactors, which is a significant cost for us.
However, we are finishing the recycling project now, which use that we will reuse the drinking water instead of using new one, so that will save a lot of cost. I will also say that we have different initiatives on reducing the OpEx going forward, and that's especially important as we start next year, maybe to peak on the production wall, and then we will focus on productivity. But we still have a lot of effort in increasing the volumes also in 2024. There's a question about gross margin. I would say that, t here's a question about the gross margin and current raw material costs. I would say that the ma- raw material costs started to materialize, sorry, start to stabilize in Q4 2023, after a decrease throughout the previous, in 2023.
I would say that the raw material that we will consume in 2024 probably will have a similar cost as the raw material we consumed in Q4 2023, maybe slightly less this year. And then there is a question on research on the development, new project, machinery, et cetera, I think, and also cost savings. I think I mentioned some of the cost savings that we're working on. I think 2024 will still be a year we will have a lot of focus on increasing both the production and sales volume. I'm not sure if you want to add anything there, Magnus.
No, of course, as we, as we ramp up with new technology and improve and optimize our processes, there are R&D activities ongoing to, to optimize that part, which, of course, is, going to reduce, the cost as we go forward. That's kind of part of the Metformin Expansion, project.
I think that was all, and we have answered the questions. I think we can close the call.
Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.