Good day, and thank you for standing by. Welcome to the Vistin Pharma quarterly report, first quarter 2024 webcast conference call. At this time, all participants are in the listen-only mode. After the speaker's presentation, there'll be a question-and-answer session. To ask a question via the telephone, you need to press star one one on your telephone keypad. You will then hear an automated message if raising your hand is raised. To withdraw your question, please press star one one again. To ask a question via the webcast, please use the Q&A box available on the webcast link anytime during the conference. Please be advised that today's conference is being recorded. It is now my pleasure to hand you over to the CEO of Vistin Pharma, Magnus Tolleshaug. Please go ahead.
Yes, thank you. Welcome all to this first quarter 2024 presentation. We will now start by going through the highlights of the quarter. The revenue of the first quarter ended at NOK 104 million versus NOK 101 million in the first quarter of 2023. The 11% increased sales volume compared to the same quarter last year has resulted in higher revenue. We have had an unplanned maintenance repair on Line 2 in the quarter, which has resulted in a lower-than-planned production and sales volume. The EBITDA of the first quarter ended at NOK 20 million versus NOK 14 million in the first quarter 2023, an increase of 45% if we compare this quarter with the first quarter of 2023. The EBITDA was positively affected by increased sales volume and the product mix, and the EBITDA was negatively affected by a one-time inventory adjustment of NOK 7 million.
After the unplanned maintenance and repair on Line 2 in the first quarter, the line has been producing according to plan from fiscal week 14. Fiscal week 14, that's the first week of April. So, Line 2 was under repair for several weeks in Q1, so we lost some volume there. However, it shows that we have a robust business now with the two lines. We are able to deliver NOK 20 million on the bottom line, even with an unplanned stop and some inventory write-off. The acquisition of 15% of CF Pharma was completed and paid in March. Additional dividend of NOK 0.75 per share was paid in January 2024 to the shareholders.
The board of directors will propose for the annual general meeting an ordinary dividend of a total of NOK 1 per share to be paid partly in June with NOK 0.5 and the remaining part in November with NOK 0.5 . Vistin Pharma, we are a pure-play metformin company with a bright outlook, as we like to say. Diabetes is one of the largest health emergencies in the 21st century. Around 550 million people have diabetes today, and about 90% of those are type 2 diabetes. Typically, type 2 diabetes is treated with the first-line treatment, metformin, which is the gold standard treatment for type 2 diabetes. We have a bright outlook for Vistin Pharma, as we like to say, as we are a leading global producer of premium-quality metformin.
The market demand for metformin is expected to grow with a compound annual growth rate of 5%-6% on an annual basis. And Vistin has a global market share, or our global market share will be approximately 10% with the new capacity. It's about 10% today, and it will remain 10% because we are growing in a growing market. For those following us from quarter-to-quarter, you have probably seen this slide before, but it is worthwhile then mentioning, we think, especially for new participants. Diabetes is really a global epidemic. More than 5 million people die every year of diabetes, and the number of people with diabetes in the world is expected to increase by 50% from 2019 - 2045, up to 750 million people. So it's really an epidemic.
At Vistin, we are proud of delivering medication which is affordable, efficacious, and has a good safety profile to people around the world, especially patients in low and middle-income countries who typically can afford metformin, which is normally paid out of pockets in those countries. For us, this gives purpose to what we do, for sure. This is just a quick map of our sales and distribution areas in the world. We have global sales. We sell all the way from Japan in the east to the U.S. and LatAm in the west. We typically then deliver the API to pharmaceutical companies who then transform this into the finished drug products and then put it into blisters and bottles and distribute it to wholesalers and pharmacies around the world. Today, more than Vistin Pharma API is at least sold in more than 100 countries in the world.
Vistin Pharma has had a long and successful growth track record. The company, as you can see from the graph here, has been optimizing and fine-tuning the business and manufacturing for many years. In 2022, we installed the second manufacturing line. From 2023, that was the first full year with two manufacturing lines. It's nice to see that the new line and the two lines are materializing into sales. All the way to the right, you can see the numbers of the first quarter, 2024, which, as mentioned, was partly impacted by an unplanned maintenance stop in the quarter. With that, I will hand over to our CFO, Mr. Alexander Karlsen, who will go through the figures behind.
Thank you, Magnus. I think we've already been touching on the sales volume. However, as you can see, there's a nice increase from around 1,100 tons in the first quarter of 2023 and to around 1,330 tons in this quarter. The sales volume also, as mentioned, is limited by the unplanned stop on Line 2 , and the unplanned stop will also limit available volumes in the beginning of the second quarter. The revenue increase from NOK 104 million in the first quarter last year compared to NOK 104 million this quarter is driven by the already mentioned volume increase. However, it's important to emphasize that the global market price for metformin has gone down since Q1 last year, and that's due to the decreasing prices of input factors like raw materials and freight.
Having a look at the gross margin, which came in at around 56%, this was affected by the one-time negative inventory adjustment of NOK 7 million. There were write-offs in the first quarter due to some material that was produced but not complying with Vistin's strict quality standards. Excluding the one-time inventory adjustment, the gross margin would have been around 60%, which is according to our ambition. EBITDA came in at NOK 20 million compared to NOK 14 million in Q1 last year, which is a nice 45% increase.
And the increase is driven by the higher sales volume and a favorable product mix. And again, unfortunately, the EBITDA was negatively affected by inventory write-off of NOK 7 million in the quarter. Looking at the key figures, we've been through the revenue and the EBITDA. Looking at the EBIT, which came in at around NOK 15.8 million compared to NOK 9.9 million last year.
Depreciation has an increase compared to last year, and that's driven by the fact that we did not capitalize and start to depreciate all the MEP equipment before in Q2 last year. Net finance is negative with NOK 5.9 million, where NOK 3 million of this is unrealized FX loss on future cash flow hedges, so no cash effect in the quarter. That gives a profit before tax of NOK 9.8 million and a net profit of NOK 7.7 million for this quarter compared to -NOK 2.98 million Q1 last year. Going to the balance sheet, starting with the assets, total non-current assets of around NOK 250.5 million, which is mainly the fixed assets. Total current assets of NOK 149.9 million, which in total gives total assets of around NOK 400 million, which is similar to previous years. We still see reduced freight lead times through the Suez Canal.
However, there has not been an impact on production in the first quarter as we have local safety stock of critical raw materials. Having a look at the equity and liability side of the balance sheet, total equity as of end March, NOK 297 million. There's a decrease in the share premium in the quarter driven by the dividend payout of around NOK 33 million in January. Total non-current liabilities, NOK 10.4 million, and current liabilities of around NOK 92.7 million. There's a change from a net cash position as of end 2023 to a net debt position of NOK 19 million as of end of March.
And this is driven by the mentioned dividend payout and the acquisition of 15% of the shares in CF Pharma. Total liabilities, NOK 103 million, while total equity and liabilities equals around NOK 400 million. I think that was all from my side, Magnus. I'll give the word back to you.
Yeah. Thank you, Alexander. I will talk a bit about our strategy, our double capacity, double-care metformin strategy. Our aim is to double our capacity without increasing the impact on the environment or local community. It's consisting of four pillars. We are a strategically positioned producer of two different metformin products today: metformin HCl, which is the API, and direct compressible granules, the DC grade. This is pre-processed granules that we sell to customers so that they can put directly on their tableting machines to avoid the unit operation of granulation and thereby save time and costs. We continuously work to enhance our capability to supply tailor-made products. This is important because different customers have different needs. We work on improving our cost of goods by investing in cost-efficient supply of raw materials.
We are typically multi-sourced on key materials so that we're able to get good prices in the market, and we're leaning our processes. We are strategically well-positioned as many European customers prefer high-quality supplies, nearshore production, and a leading ESG profile. Vistin Pharma has a lucrative ESG profile. Just as an example, we use 100% sustainable hydropower, which, of course, gives a different carbon footprint than if you produce metformin with coal power, which has quite often been done in the Asian part of the world. We have an attractive growth potential with a new production line, which was installed in 2022. We looked at the figures. We had an increase in sales volume from 2022- 2023 of 44%, and Vistin is experiencing strong demand for our metformin. We are a premium producer in a competitive market. Typically, we sell to reputable international pharmaceutical companies.
We have a state-of-the-art fully automated manufacturing plant in Kragerø, Norway, and we are certified by all significant international regulatory bodies. We typically work with long-term partnerships with customers, and we are positioned in the high-quality premium segment. The metformin market is expected to continue to grow by 5%-6% annually. Diabetes is one of the largest health crises of the first 21st century, and the metformin is expected to maintain its position as the gold standard treatment for type 2 diabetes in the foreseeable future. Metformin is typically used as a baseline treatment. The additional demand for metformin in the world is by industry experts forecasted to grow by approximately 23,000 metric tons by 2028. Talk a bit about what we call the second wave of growth.
We announced during our Capital Markets Day in 2023 and also in the last quarterly report our strategic intent to become a European multi-product CDMO with more products to offer from our portfolio. Vistin has acquired 15% of CF Pharma in Hungary at a transaction price cap of EUR 1.6 million, which consists of a base price and an earn-out element. CF Pharma is an API CDMO. CDMO stands for Contract Development and Manufacturing Organization. They are located in Budapest in Hungary with a broad customer base of recognized international pharmaceutical companies. CF Pharma has a proven track record in developing and commercializing active pharmaceutical ingredients, APIs. The company currently has five commercial APIs on the market with another eight APIs under development in R&D. CF Pharma has an extensive production site of around 150,000 square meters located centrally in Budapest.
They have around 170 employees and an extensive R&D department for development of new products and processes. Some ballpark figures, the annual revenue of CF Pharma has been around EUR 10 million-EUR 14 million. The previous three years, the EBITDA has been between EUR 1 million-EUR 3 million. We see this acquisition of 15% minority stake as a first agreed step in a potential closer partnership in the future. This may broaden our product portfolio and form an important basis for future growth and opportunities. More to come on this as it develops forward. With that, I think we are done with the presentation and can open up for questions.
Thank you. As a reminder, to ask a question via the telephone, please press star one one on your telephone keypad and wait for your name to be announced. To withdraw your question, please press star one one again. To ask a question via the webcast, please use the Q&A box available on the webcast link. Please stand by while we compile the Q&A roster.
So we have already received a couple of questions here. The first one is related to how many days in the first quarter was the second production line down. We can say that it was down a significantly part of the first quarter. Then there's a question about competition from other medicines. I think, Magnus, you can take that.
Yes, I can do that. It's a natural question because there's a lot of talk in the media and the writing about the semaglutide, Ozempic, and Wegovy, and Mounjaro products out there. Metformin is, as mentioned, the gold standard treatment for metformin type 2 diabetes. 90% of people with diabetes have diabetes type 2. If you look at the cost of Wegovy or Ozempic, the list price of Ozempic, just to make an example, is $900 per 4 weeks treatment. If you compare that with metformin, which is about $3 per 4 weeks, we do not expect that semaglutide or these others will have any impact on our business and the consumption of metformin because it's used as a baseline treatment. But it's a good alternative also for obesity patients for the treatment of that.
Thank you, Magnus. And then there's a question about when we can expect the production to run at max capacity. I think we can say that we are continuously ramping up, but this is also depending on the sales volume and the mix. But yeah, I think that's what we will comment on that.
Yeah.
There's a question about the raw materials from China. I think there are two main raw materials to produce metformin, which is DMA and DCDA. For both of these, we have several suppliers. We're not single-sourced, but DCDA is mainly sourced from China, but from several different suppliers. There's another question about investment in reusing water and start status for that project. I can say that the project installation was completed in the first quarter. This is a product where we will reuse all the water that we use to cool down the reactors in the production. We spend today or before the installation a lot of drinking water from Kragerø to cool down the equipment.
But now, with the recycling of the water, there will be significantly cost savings from this project, and we expect that this cost saving will start in the second quarter. We are currently testing and running up the recycling equipment.
Yeah. Then there's a question here about if we can elaborate more on the investment in CF Pharma. We see this acquisition of the 15% minority share as a first agreed step in a potential closer partnership in the future. CF Pharma, they have a pipeline today. There are different ways of collaborating with CF Pharma in the future. It could be via products. It could be via introducing new products to the market via Vistin or other ways of business. This is a process that we now go through with CF Pharma to sit and look for opportunities. But also, today, we have a robust business with a good cash flow and earnings. So, that said, we are also opportunistic when it comes to other options to grow our business further.
There is a question on the sales pipeline. Maybe you can answer that, Magnus.
Yeah. So Vistin typically have today only metformin API and the DC grade, and we are working on also customizing some of the products we have under metformin. And with the partnership with CF Pharma, our ambition is also to discuss opportunities of business to look for other products to fill into the pipeline. But there are no concrete products in the pipeline at this point.
I think that's all the questions we have received. I think we can now close the poll.
Thank you. That concludes today's conference call. Thank you all for participating. You may now disconnect.