Hofseth Biocare ASA: A Promising Investment in Sustainable Health Ingredients

Hofseth Biocare ASA (HBC), a Norwegian consumer and pet health ingredient supplier, has demonstrated impressive growth and potential in the sustainable health ingredients market. With a focus on upcycling salmon industry side streams, HBC has developed a unique portfolio of bioactive peptides, collagen, and oils that cater to both human and pet health markets. The company's commitment to sustainability, optimal utilization of natural resources, and full traceability has positioned it as a leader in the industry.

In the fourth quarter of 2024, HBC reported a 35% increase in full-year sales revenue, reaching NOK 256.8 million. This growth can be attributed to the company's shift towards premium products, particularly CalGo® and OmeGo®, which have driven higher-margin B2B human nutrition sales. Gross margins improved across all segments, with B2B margins reaching 42.4% in Q4, up from 37.4% last year. This improvement in gross margins indicates the strong demand and profitability of these premium products.

HBC's restructuring efforts in Q4 led to improved scalability and streamlined operations, with cost optimization initiatives resulting in one-time cost effects of 1.9m related to personnel turnover and dismissals. Despite these costs, the company's capacity utilization at the Midsund facility improved to 89% in the quarter, demonstrating increased efficiency and productivity.

The company's record-high long-term contracts in the pet and feed segment, along with increased retail distribution and e-commerce traction, have driven renewed growth in the consumer health division. These factors have contributed to the overall increase in sales revenue and the company's strong financial performance.

HBC's commitment to scientific evidence and academic partnerships has led to the identification of unique health benefits for its ingredients. The company's research has demonstrated improved iron metabolism, fat reduction, immune health benefits, and bone and joint health support. These discoveries have resulted in the granting of patents protecting these innovations and the spin-out of a biotech-focused company, HBC Immunology (HBCI), which is focused on developing therapeutics for prostate cancer, ovarian cancer, and asthma.



In conclusion, Hofseth Biocare ASA's focus on sustainable health ingredients, premium products, and strong financial performance make it an attractive investment opportunity. The company's commitment to scientific evidence, academic partnerships, and innovation positions it well for continued growth and success in the competitive health ingredients market. As the demand for sustainable and high-quality health products continues to grow, HBC is well-positioned to capitalize on this trend and deliver value to its shareholders.