Natural feels effects of CLA handover

- Last updated on GMT

Related tags: Milk, European union, Norway

Norwegian CLA company Natural has seen profits fall considerably in
this year's second quarter after a major boost to revenue from new
licensing agreements last year.

During last year's first half Natural received initial payments from Germany's Cognis for rights to a number of the Norwegian firm's patents on Tonalin brand CLA and access to most of its customer base across Europe and the US.

This swelled revenue for the six-month period, which then dropped significantly in last year's second half as Cognis also took over CLA sales. The situation has continued into the first half of this year.

Last year operating revenue was down to NOK 14.6 million in the fourth quarter from NOK 38.3 million the previous year. In this year's second quarter, Natural generated operating revenue of NOK 12.4 million.

However Natural has also announced a new development - CLA's launch for dairy cattle feed in the EU - and promising uptake of Cognis' Tonalin.

Cognis is under agreement to make guaranteed minimum payments to Natural over the next three years, in the high double digit range in million Norwegian krone. Thereafter, until the agreement runs out in 2018, royalty rates vary from middle single digit to low double-digit figures depending on the area of application for CLA.

This year Tonalin CLA has been added to its first food products, a new range of dairy and juice products in Spain under the brand name NATURLinea. From product launch in April to the end of July 2004, AC Nielsen report store sales of Tonalin CLA enriched milk of 1,662 tonnes and of Tonalin CLA enriched yoghurt of 234 tonnes.

Meanwhile a product developed for cattle has entered full-scale production and is ready for delivery. It has reportedly already attracted orders from several EU countries and further market penetration is expected over the next few months.

Natural recorded a post-tax profit of NOK 0.8 million for the second quarter compared to NOK 2.7 million for the same quarter of 2003.

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