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SNF.V - Sunora Foods Inc.

Discussion in 'Canadian Stocks' started by Theoilguy55, Jan 6, 2016.

  1. Theoilguy55

    Theoilguy55 New Member

    Aug 19, 2014
    Likes Received:
    Sunora Foods Inc. Due Diligence Report

    Symbol: SNF.V
    Price: $0.12
    Common Shares: 42,254,332
    Insider Holdings: 32 million (75.7%, CEO owns 30 million alone)
    website: http://www.sunora.com/

    Most Recent Financial Results (Ending September 30th 2015)

    Cash: $2,752,139
    Accounts Receivable: $1,163,447
    Inventory: $486,377
    Prepaid Expenses: $4,501
    Deferred Tax: $150,062
    Total Assets: $4,556,526

    Accounts Payable: $819,939
    Income Tax: $120,165
    Total Liabilities: $940,104

    Quarterly Earnings Summary:
    2014 Total - $189,073
    2015 Q1 - $189,073
    2015 Q2 - $110,940
    2015 Q3 - $198,771

    Revenue After 9 Months
    Sales - $8,452,570
    Gross Margin - $945,250
    Total Costs - $211,985
    Income Before Tax - $733,265
    Net Income - $549,949 or $0.013c EPS

    MD&A Highlights

    Sunora is a Calgary‐based trader and supplier of canola, soybean, corn, olive and other food oils. Currently, the Company is a relatively modestly‐sized player participating in an international business populated by some of the largest companies in the world. It has successfully maintained a niche position that has been achieved by building strong relationships with its suppliers and customers through a history of reliable and responsive service. While the Company regularly cooperates with many of these companies, it also occasionally competes with companies that have far greater resources.

    Sunora had sales in line with expectations for the nine month period ended September 30, 2015. Sales were negatively impacted by a decline in oil related commodity prices of over thirty percent and bulk oil sales declined in the third quarter.

    The $549,949 of net income and comprehensive income in the nine months ended September 30, 2015 was due to better gross margins attributable to a continuing higher percentage of packaged oil sales versus bulk oil sales. Profitability also benefitted from the positive impact of the foreign exchange gains.

    The foreign exchange gain or loss arises primarily as a result of inventory purchases and sales, to the extent that they are denominated in US currency.

    Sunora's cash balances increased $967,992 in the nine months ended September 30, 2015. This increase since December 31, 2014 resulted primarily from higher income for the nine month period, the reduction of inventory, and a decrease in accounts receivable affect slightly by a decrease in accounts payable and accrued liabilities during that period. Sunora’s cash balance increased during the nine months ended September 30, 2015 primarily due to an increase in net income, a decrease in inventory and decrease in receivables offset partly by decrease accounts payable and accrued liabilities during that period

    Sunora maintains strong relationships with a number of strategically located customers internationally and in North America. These relationships continue to drive demand for food oil products from Canada, with Sunora well positioned to meet existing and additional demand. Management has focused on increasing visibility in emerging markets, with a specific focus on international economies including Asia, and has met this increased demand with Canadian manufactured food oil products. Sunora operations can be impacted by geopolitical situations that may restrict delivery, but this has not significantly hindered operations to date. As the middle class in these emerging economies demands higher quality and healthier foods, Sunora is well positioned to meet additional demand.

    The financial position of the Company is strong relative to its financial requirements and commitments. Management has maintained a conservative approach to day‐to‐day operations, monitoring the timing of its inventory turnover closely to ensure it can meet its obligations to suppliers within their credit facilities. Collections from customers are stringently managed such that substantially all receivables at September 30, 2015 were less than 60 days old. Sunora's Current Ratio (Current Assets divided by Current Liabilities) target as set by management is 2.0:1. Including its cash balance of $2,752,138 at September 30, 2015, Sunora's Current Ratio at September 30, 2015 was 4.7:1. The Company has continued to have a strong working capital position. Additionally, the Company has neither debt nor any financial obligations other than to fund its operations.
  2. Theoilguy55

    Theoilguy55 New Member

    Aug 19, 2014
    Likes Received:
    Sunora Foods Inc. Two year sales History

    Originally this was a capital pool (Thoroughbred Capital Inc, symbol TBC.P), until a deal was struck April 10th 2013 to acquire Sunora Foods Inc for 30 million shares at a price of $0.167c per share($5 million)

    First financials after the merger were released April 30th 2014, below are all the quarters broken down

    Year end: August 31st, 2013
    Cash: $836,292
    Total Assets: $3,000,464
    Total Liabilities: $1,014,299
    Revenue: $15,498,660
    Net Income/Loss: $79,418 - $0.0019c

    Quarter Ended: December 31st, 2013
    Cash: $ 1,646,563
    Total Assets: $ 3,848,337
    Total Liabilities: $ 1,016,838
    Revenue: $ 4,794,330
    Net Income/Loss: -$1,074,649 – ($1.25 million cost for listing expense and transaction cost)

    Quarter Ended: March 31st, 2014
    Cash: $ 1,757,907
    Total Assets: $ 3,739,165
    Total Liabilities: $ 920,557
    Revenue: $ 2,959,727
    Net Income/Loss: -$58,792 – due to some oil pricing and shipping issues(see MD&A)

    Quarter Ended: June 30th, 2014
    Cash: $ 1,685,719
    Total Assets: $ 3,610,622
    Total Liabilities: $ 670,434
    Revenue: $ 2,836,903
    Net Income/Loss: $ 121,580 - $0.003c

    Quarter Ended: September 30th, 2014
    Cash: $ 2,358,141
    Total Assets: $ 4,442,591
    Total Liabilities: $ 1,362,255
    Revenue: $ 3,496,856
    Net Income/Loss: $ 140,148 - $0.0033c

    Quarter Ended: December 31st, 2014

    Cash: $ 1,784,147
    Total Assets: $ 4,139,409
    Total Liabilities: $ 1,072,936
    Revenue: $ 3,941,719
    Net Income/Loss: $ -13,696 – flat due to added G&A marketing cost into other countries (see MD&A)

    Quarter Ended: March 31st, 2015
    Cash: $ 2,375.580
    Total Assets: $ 4,494,917
    Total Liabilities: $ 1,188,206
    Revenue: $ 2,743,967
    Net Income/Loss: $ 240,238 - $0.0053c

    Quarter Ended: June 30th 2015
    Cash: $ 2,504,091
    Total Assets: $ 4,168,457
    Total Liabilities: $ 750,806
    Revenue: $ 3,233,996
    Net Income/Loss: $ 110,940 - $0.0026

    Quarter Ended: September 30th, 2015
    Cash: $ 2,752,139
    Total Assets: $ 4,556,526
    Total Liabilities: $ 940,104
    Revenue: $ 2,451,477
    Net Income/Loss: $ 198,771 - $0.0047c

    As you can clearly see from the financials, SNF has more than tripled its cash position over the last couple years, increased assets by 50%, decreased liabilities, and started to establish itself in news markets in Asia. Several news releases were announced in 2015 with regards to an expansion plan and we will likely see the benefits of this in 2016.
  3. Theoilguy55

    Theoilguy55 New Member

    Aug 19, 2014
    Likes Received:
  4. Theoilguy55

    Theoilguy55 New Member

    Aug 19, 2014
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