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An official of the Ministry of Justice is trying to interfere in the operation of AS Olainfarm

on January 29, 2020

There is reason to believe that OLMAFARM Ltd. deliberately violated the court ruled ban and voted in a false Extraordinary Shareholders’ meeting

JSC Olainfarm has a reason to suspect the interference of Laila Medina, Deputy State Secretary for Legal Affairs at the Ministry of Justice, in the operation of the company. This can be inferred from publicly disclosed information provided by OLMAFARM Ltd. that the Ministry of Justice has been involved in an attempt to influence a dispute between Valerijs Maligins’ heir and the shareholders of JSC Olainfarm. The official from the Ministry of Justice has issued a favorable opinion to a particular shareholder, OLMAFARM Ltd., which allows to influence the company operations and the work of institutions under the authority of the Ministry, such as the Register of Enterprises, with the purpose of making decisions that are favorable for themselves, while ignoring the rights and views of other shareholders

The above is also confirmed by the fact that the largest shareholder, OLMAFARM Ltd., which has been denied voting rights by the court, claims that the Ministry of Justice has assessed the circumstances of the dispute with the heirs of JSC Olainfarm, incl. pending civil proceedings. It has allowed the Ministry of Justice to conclude that the arguments of OLMAFARM Ltd. are justified, but the court’s decision, in the context of a dispute with the heirs of JSC Olainfarm, regarding the denial on the use of voting rights is questionable.

JSC Olainfarm has addressed these facts with official letters to both the Ministry of Justice and the Register of Enterprises.

The conclusion by the Ministry of Justice is considered to be a gross violation of the principle of the independence of the judiciary and interference with the work of the judiciary. At the same time, it is the exact opposite of the Ministry of Justice’s previous position of not intervening in disputes between the parties.

Although in its opinion, the Ministry of Justice does not refer directly to any particular case, in the view of JSC Olainfarm, it does analyze a specific case that is currently in the process of litigation. The above is also confirmed by the fact that the Financial and Capital Market Commission (FCMC) has approached the Ministry of Justice and asked it to provide an answer in connection with the shareholders’ meetings of JSC Olainfarm.

According to publicly available information distributed by Peteris Rubenis, Chairman of the Board of OLMAFARM Ltd., the opinion by the Ministry of Justice and the explanation by the FCMC of determining the quorum at JSC Olainfarm Shareholders’ meetings has served as the basis for holding the Shareholders’ meeting in a manner not according to the Commercial Law.

A fraudulent Shareholders’ meeting has been held

It is known that Martins Tambaks has submitted unlawful amendments of the Supervisory Council and the Management Board to the Register of Enterprises, claiming that the Extraordinary Shareholders’ meeting allegedly took place near the premises of 5 Rupnicu Street, Olaine, at 11:36AM. This meeting has not been convened by the Management Board in accordance with the regulatory enactments and thus, in the opinion of JSC Olainfarm, it cannot be considered as an Extraordinary Shareholders’ meeting. This allows JSC Olainfarm to conclude that false news and a forgery of an Extraordinary Shareholders’ meeting were submitted to the Register of Enterprises. It should be brought to attention that Articles 272 and 275 of the Criminal Law request liability for the distribution of false information to a public authority and the falsification of documents. It should be emphasized that on 24 January, the only legitimate Extraordinary Shareholders’ meeting of JSC Olainfarm was convened at 11:00AM and was not held due to a lack of quorum.

This unrecognizable meeting has not been convened and it is not clear which JSC Olainfarm shareholders took part in this fraudulent meeting. The Commercial Law and the Law on the Financial Instruments Market stipulate the exact procedure for convening and holding an Extraordinary Shareholders’ meeting. Such a meeting has not been convened by the Management Board of JSC Olainfarm in accordance with the regulatory enactments and thus cannot be considered as a legitimate JSC Olainfarm Extraordinary Shareholders’ meeting.

OLMAFARM Ltd. has violated the court prohibition

JSC Olainfarm has reason to believe that OLMAFARM Ltd. has deliberately violated the court prohibition and voted on all issues on the agenda during the fraudulent meeting. This reinforces the suspicion that these persons have attempted to obtain an unlawful result through formal legal means in order to take control of JSC Olainfarm. In addition, JSC Olainfarm believes that the company should ensure equal shareholder protection. Publicly available information indicates that some of JSC Olainfarm shareholders have already condemned this behavior as unfair and unlawful.

The procedure for convening Shareholders’ meetings has been clearly defined by the legislator, amongst other things providing the right to all shareholders to be notified of an Extraordinary Shareholder’s meeting. The rights of other shareholders to participate in the meeting and to exercise the rights of shareholders specified in regulatory enactments were denied due to the lack of compliance with the procedure of convening and holding of the meeting.

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An official of the Ministry of Justice is trying to interfere in the operation of AS Olainfarm

In November Group’s revenues increased by 14%, revenues for the full year to exceed target

on December 16, 2019

JSC Olainfarm preliminary consolidated results for November 2019 indicate that revenues increased by 14% compared to the same month last year and reached 12.4 million euro. At the same time consolidated results for the first eleven months of 2019 show that revenues reached 131.2 million euro, which is an increase by 17%, compared to the eleven-month period of 2018. Extraordinary rapid increase in sales was in Kirgizstan, Kazakhstan and Russian markets. Products of Olainfarm Group during this period were sold in 55 markets worldwide.

Consolidated sales in November show revenue increase in eight out of ten main markets. In Russia sales grew by 34%, in Belarus by 15%, in Ukraine by 2%, in Kazakhstan by 47%, in Moldova by 27%, in Kirgizstan by 335%. The sales resumed in Italy, where there were almost no sales a year before. Drop in sales was recorded in Latvia by 3% and in Uzbekistan by 19%.

Extra sales to pharmaceutical distributors in Russia continued also in November. It is important to notice that these revenues are achieved under commercial terms, which are customary to normal market practice and do not affect profitability.

In the eleven months of 2019 Olainfarm Group’s revenues were 131.2 million EUR that is 17% more than a year before. Contribution of the main sales markets of Olainfarm Group increased to 80% of the total revenue – Russia had the largest share of 34%, Latvia – 27%, Belarus – 11% and Ukraine – 8%. The Group’s other major sales markets include Kazakhstan, Uzbekistan, the Netherlands, Germany, Tajikistan and Lithuania. The most rapid sales growth during this eleven-month period was achieved in the Netherlands, where sales grew by 161% compared to the last year, and in Uzbekistan where sales grew by 33%. Sales in Russia improved by 30%, in Latvia and Belarus by 11% and in Kazakhstan by 15%, in Germany by 2% and in Tajikistan by 30%. Amongst the largest sales outlets a decline was marked in Ukraine (-1%) and in Lithuania (-21%).

Total sales forecasted for Olainfarm Group this year are in the amount of 133.3 million EUR, and it is fulfilled by 98%. Although December revenues will be lower than the last year’s results, nevertheless annual sales figure will exceed the result of 2018.

“With the approach of the end of this year, JSC Olainfarm Group’s forecasted turnover plan has been almost completed. The good results of this year allow us to look at the upcoming year with optimism. Additional sales to Russian drug distributors are continuing in November related to the application of the requirements regarding verification of medicinal products in Russia starting next year. Sales in this market are expected to be lower in the first months of the upcoming year. Next year, the main challenges for Olainfarm will be related to the changes in the regulation of the Eurasian Union drug market, the renewal of drug files according to markets, the increase of internal process efficiency as well as the implementation of a new strategy,” emphasizes Lauris Macijevskis, Member of the Management Board of JSC Olainfarm.

November 2019, consolidated sales       Sales, thous. EUR     Share in total sales      Changes to November 2018
Russia 4 642 37% 34%
Latvia 3 191 26% -3%
Ukraine 1 331 11% 2%
Belarus 1 004 8% 15%
Kazakhstan 429 3% 47%
Croatia 216 2% N/A
Moldova 176 1% 27%
Uzbekistan 158 1% -19%
Italy 150 1% 16532%
Kirgizstan 141 1% 335%
Other 968 8% -28%
Total 12 407 100% 14%

 

11 months 2019, consolidated sales      Sales, thous. EUR       Share in total sales       Changes to 11 months 2018
Russia 43 964 34% 30%
Latvia 35 215 27% 11%
Belarus 14 788 11% 11%
Ukraine 10 545 8% -1%
Kazakhstan 3 516 3% 15%
Uzbekistan 2 962 2% 33%
Netherlands 2 030 2% 161%
Germany 1 808 1% 2%
Tajikistan 1 690 1% 30%
Lithuania 1 346 1% -21%
Other 13 365 10% 10%
Total 131 228 100% 17%

Unconsolidated sales – November and 11 months

According to preliminary unconsolidated figures, JSC Olainfarm sales reached 9.5 million euros in November, which represents an increase by 19% compared to November, 2018. Sale of products improved in Russia (+44%), Ukraine (+7%), Latvia (+3%), Belarus (+12%), Kazakhstan (+29%). The sales resumed in Italy and chemical substances in the amount of 216 thousand EUR were delivered to Croatia. The sales in November declined in Latvia by 9%, Uzbekistan by 19% and in Germany by 15%.

The unconsolidated sales results for the first eleven months of 2019 show that JSC Olainfarm sales reached 101.3 million euros, which represents an increase by 19% compared to the first ten months of 2018. During this reporting period, sales have increased in nine out of the ten major markets of Olainfarm – Russia (+40%), Latvia (+2%), Belarus (+9%), Uzbekistan (+33%), Kazakhstan (+2%), the Netherlands (+165%), Germany (+5%), Tajikistan (+27%) and in Italy (+69%). Revenues declined by 1% in Ukraine.

November 2019, unconsolidated sales      Sales, thous. EUR      Share in total sales      Changes to November 2018
Russia 4 354 46% 49%
Latvia 1 467 15% -9%
Ukraine 1 331 14% 7%
Belarus 700 7% 12%
Croatia 216 2% NA
Uzbekistan 158 2% -19%
Kazakhstan 154 2% 29%
Italy 150 2% 16532%
Germany 135 1% -15%
Kirgizstan 118 1% 266%
Other 722 8% -33%
Total 9 505 100% 19%

 

Eleven months 2019 unconsolidated sales      Sales, thous. EUR       Share in total sales      Changes to eleven months 2018
Russia 40 717 40% 40%
Latvia 16 013 16% 2%
Belarus 11 903 12% 9%
Ukraine 10 276 10% -1%
Uzbekistan 2 962 3% 33%
Kazakhstan 2 038 2% 2%
The Netherlands 2 052 2% 165%
Germany 1 846 2% 5%
Tajikistan 1 613 2% 27%
Italy 1 315 1% 69%
Other 11 035 11% 6%
Total 101 770 100% 19%

Results of subsidiaries – November and the first eleven months of 2019

The pharmacy chain SIA Latvijas Aptieka sales reached 2.3 million euros in November 2019, which represents a 7% increase compared to November 2018. 68 pharmacies were operating during this period. SIA Silvanols sales reached 0.6 million euros in November 2019, representing an increase by 17% vs. November 2018. The combined sales of Tonus Elast and Elast Medical in November 2019 were 0.8 million euros, which is by 26% less than this time last year. Olainmed and Diamed Medical Center sales reached 0.3 million euros, while the Belarus subsidiary NPK Biotest reached 0.3 million euros in sales in October that is higher by 31% than in November last year.

During the first eleven month period of 2019, SIA Latvijas Aptieka sales amounted to 23.8 million euros, demonstrating an 9% increase in comparison to the same time period last year. Sales of SIA Silvanols reached 5.4 million euros which is 1% less than last year. The combined sales of Tonus Elast and Elast Medical during eleven months this year totaled 8.8 million euros, which is a drop by 4%. Medical Centers Diamed and Olainmed revenues were 2.9 million euros during the first ten months of this year and the Belarus company NPK Biotest sales were worth 2.9 million euros, improving the result of the last year by 34%.

November 2019       11 months 2019
Sales markets of Olainfarm 29 46
Sales markets of the Group 37 55
Number of pharmacies 68
Sales of Latvijas Aptieka, thous. EUR 2 271 23 841
Sales of Medical centers, thous. EUR 263 2 875
Sales of NPK Biotest, thous. EUR 304 2 864
Sales of Tonus Elast and Elast Medical, thous. EUR 780 8 842
Sales of Silvanols, thous. EUR 604 5 431

According to the JSC Olainfarm budget, unconsolidated sales are planned to reach 99 million euros in 2019, while consolidated sales are expected at 133 million euros.  According to these preliminary sales figures, in the first eleven months of 2019, 103% of annual target for unconsolidated sales and 98% of annual target for consolidated sales have been reached.

JSC Olainfarm is one of the biggest pharmaceutical companies in Latvia with more than 45 years of experience in production of medication and chemical and pharmaceutical products. A basic principle of company’s operations is to produce reliable and effective top -quality products for Latvia and the rest of the world. Products made by the Group are being exported to more than 60 countries of the world, including the Baltics, Russia, other CIS, Europe, Asia, North America and Australia.

Additional information:   
Jānis Dubrovskis
Investor Relations Advisor of JSC Olainfarm
Phone: +371 29178878
Email: janis.dubrovskis@olainfarm.com

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In November Group’s revenues increased by 14%, revenues for the full year to exceed target

JSC Olainfarm draws attention of the FCMC about Pēteris Rubenis’ false and tendentious statements

on December 10, 2019

JSC Olainfarm draws the attention of the Financial and Capital Market Commission (FCMC) to the fact that on December 5, 2019 Pēteris Rubenis, in the name of its largest shareholder limited liability company OLMAFARM, disseminated false and tendentious information about Olainfarm Supervisory Council electing new officers on the Management Board of the company. Olainfarm has asked the FCMC to assess the legality of Pēteris Rubenis’ actions of disseminating false information about Olainfarm’s governing bodies, their representatives and newly elected Management Board members to the public.

In Olainfarm’s view, Pēteris Rubenis deliberately distributes information that is negative, false and based on subjective assumptions on the behalf of its largest shareholder limited liability company OLMAFARM. As is well known, one of the factors influencing the price of a company’s share is public information about the company’s management and operations. Thus, the allegations made by Pēteris Rubenis, Chairman of the Management Board of OLMAFARM, whose election has been declared invalid by the court, adversely affect both the activities of Olainfarm and the possibility that it may violate the rights of other Olainfarm shareholders and cause damage to the Latvian capital market reputation.

On December 5, 2019, shortly after Elena Bushberg was elected as a member of the Management Board of Olainfarm, it was publicly announced that the largest shareholder of JSC Olainfarm OLMAFARM, represented by its Chairman of the Management Board Pēteris Rubenis, considered the appointment of these people for the Olainfarm Management Board as illegal. According to Clause 1, Paragraph 1 of Article 292 of the Commercial Law, one of the tasks of the Supervisory Council shall be to elect members of the Management Board and supervise the activities of the Management Board. Article 4 of the Articles of Association of Olainfarm stipulates that the Management Board shall consist of seven members. Until this day, the Management Board of Olainfarm has been operating with five members. By appointing Jeroen Weites as Chairman of the Management Board and electing E. Bushberg as a Member of the Management Board, Olainfarm has met all the requirements stated in the Commercial Law and the Financial Instruments Market Act.

Olainfarm cannot agree with the statement made by Pēteris Rubenis, on behalf of limited liability company OLMAFARM, as on August 14, 2019, information about Olainfarm’s intention to attract senior management with international experience in pharmacy was already published on the website of JSC Nasdaq Riga. According to that statement, amongst other things, it was planned to strengthen the management team of Olainfarm, the Supervisory Council of the company has decided to appoint a new candidate for the position of the Chairman of the Management board with international experience in pharmacy. The change of the Chairman of the Management board is a planned strategic decision in the direction of development of Olainfarm in order to facilitate the acquisition of new markets and increase the international competitiveness of the company. Given that Pēteris Rubenis publicly commented the announcement on August 15, 2019, there is no reason to believe that he was not aware of the intention of Olainfarm’s Supervisory Council to advance the operation of the company as well as the process of selecting candidates.

Attention should also be drawn to the fact that J. Weites and E. Bushberg were selected in the framework of an international recruitment tender provided by an independent international top-level recruitment company – Amrop Latvija. During the selection process, the eligibility of the candidates for the Olainfarm Management Board member position has been carefully assessed and no circumstances have been identified that would prevent them from holding the position of the Chairman and Member of the Management Board.

It should be noted that by the ruling of the Zemgale District Court on November 20, 2019, the court has annulled the decision made during the meeting of the shareholders of limited liability company OLMAFARM on June 13, 2019, appointing its sole member Pēteris Rubenis as a member of the Management Board and demoting the previous Management Board member.

JSC Olainfarm is one of the largest companies in the Baltic States with more than 45 years of experience in production of pharmaceuticals and chemical and pharmaceutical products. The basic principle of the company is to produce reliable and effective top quality products for Latvia and the whole world. Currently, JSC Olainfarm products are exported to more than 60 countries worldwide, including the Baltic States, Russia, other CIS countries, Europe, North America, Asia and Australia.

Additional information:   
Jānis Dubrovskis
Investor Relations Advisor of JSC Olainfarm
Phone: +371 29178878
Email: janis.dubrovskis@olainfarm.com

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JSC Olainfarm draws attention of the FCMC about Pēteris Rubenis’ false and tendentious statements

Olainfarm Group announced the appointment of a new executive

on December 5, 2019

Today, the Supervisory Council of JSC Olainfarm approved Elena Bushberg as a member of the Management Board and CEO of Olainfarm, a part of Olainfarm Group of companies. Elena Bushberg brings over 25 years of international pharmaceutical experience to the Management Board in areas such as finance, supply & operations, marketing and sales in CIS countries, with engagement in creating, managing, and leading high performing teams and developing talent across multiple business areas.

In order for the company to achieve its future strategic goals, JSC Olainfarm Supervisory Council has improved the distribution of corporate governance functions: 1) the Chairman of the Management Board of JSC Olainfarm monitors the corporate governance of the Olainfarm Group of companies; 2) a member of the Olainfarm Management Board acts as the CEO of the largest enterprise of the Group JSC Olainfarm.

Last week Jeroen Waites was approved as the Chairman of the Management Board and CEO of the Olainfarm Group of companies and he is entrusted with the overall management and strategic development of the Olainfarm Group of companies as well as new market niche and sales market expansion. The Olainfarm Group of companies includes Olainfarm, Latvijas aptieka, Silvanols, Tonus Elast, DiaMed, OlainMed, NPK Biotest and Kiwi Cosmetics.

In addition, Elena Bushberg has been appointed as a member of the Management Board and CEO of JSC Olainfarm, the main business entity in the Olainfarm Group of companies, her primary focus will include leading the transformation of business processes at JSC Olainfarm and its existing affiliates to raise productivity and effectiveness of manufacturing, as well as sales and marketing operations in order to achieve sustainable organic growth ahead of the curve.

Chairman of the Supervisory Council of JSC Olainfarm Gundars Bērziņš emphasizes: “We have succeeded in fusing two competencies that are very important for the company – knowledge of pharmaceutical business in both the European Union and CIS markets, which will provide the company with the necessary additional capacity for development. We are proud to have such experienced professionals join the Olainfarm team. During the senior management selection process, we highly valued Elena Bushberg’s global view on the development of the pharmaceutical industry, marketing experience, knowledge of the specifics of the CIS markets, and expertise in managing operations and building strong sales teams. ”

Elena Bushberg, a member of the Board and CEO of JSC Olainfarm: “Olainfarm is a strong international brand, well respected not only in Latvia but also worldwide, especially in the markets I have specialized in. I am excited to join JSC Olainfarm in order to bring fresh and insightful industry perspectives as well as deliver added value to the company. JSC Olainfarm has a lot of untapped business potential and the grounds for  becoming a true Baltic pharmaceutical champion. I am honored to be a part of the leadership team creating the next chapter in the JSC Olainfarm success story.

Elena Bushberg’s professional experience adds up to over 25 years at international pharmaceutical companies such as Schering-Plough, MSD and Abbott Laboratories. Since 2015 E. Bushberg has served as the General Manager of Abbott’s Veropharm, one of Russia’s leading manufacturers of pharmaceuticals and medical devices. While in this position (during the time period of 2015-2019) E. Bushberg was responsible for developing and implementing the corporate strategy, leading organizational transformation and building a winning mind-set and culture in order to raise the efficiency of business operations, thus delivering sustainable organic and inorganic growth in sales and profits. Elena Bushberg holds a professional master’s degree (Global Executive MBA) and a Certificate in Healthcare Sector Management from The Fuqua School of Business, Duke University, USA.

Elena Bushberg does not own any shares at JSC Olainfarm or any other companies. E. Bushberg will start her actual employment at the company as soon as she has received the necessary formalities for employment in Latvia.

Jeroen Weites, Lauris Macijevskis, Raimonds Terentjevs, Signe Baldere-Sildedze, Milana Beļeviča and Mārtiņš Puriņš remain on the Management Board of the JSC Olainfarm.

JSC Olainfarm is one of the largest companies in the Baltic States with more than 45 years of experience in production of pharmaceuticals and chemical and pharmaceutical products. The basic principle of the company is to produce reliable and effective top quality products for Latvia and the whole world. Currently, JSC Olainfarm products are exported to more than 60 countries worldwide, including the Baltic States, Russia, other CIS countries, Europe, North America, Asia and Australia.

Additional information:  
Jānis Dubrovskis
Investor Relations Advisor of JSC Olainfarm
Phone: +371 29178878
Email: janis.dubrovskis@olainfarm.com

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Olainfarm Group announced the appointment of a new executive

Groups 9 months profit increased by 158% and exceeds 19 million EUR; active work has begun on renewal of drug dossiers

on November 29, 2019
  • During the first nine months of this year Group’s sales reached 98 774 thousand EUR, which is an increase by 10%.
  • Group’s EBITDA was 26 257 thousand EUR, which is by 83% higher.
  • Group’s profit reached 19 198 thousand EUR, which is the largest profit amount in history.

“Over the last nine months, we have been able to increase the Olainfarm Group’s profits to the highest level historically. This year, we have established a sufficiently stable financial base to further invest in the development of the company. Essentially it is planned to invest in the renewal of drug files so that we could continue to distribute our pharmaceutical products in the existing markets,” explained Lauris Macijevskis, Member of the Managing Board of JSC Olainfarm.

Group’s sales during the 3rd quarter of 2019 were 32 382 thousand EUR and that is by 17% more than in the 3rd quarter of 2018 when sales were 27 661 thousand EUR. In the 3rd quarter EBITDA was 9 329 thousand EUR that surpassed the figure of the 3rd quarter of 2018 by 5 339 thousand EUR or 134%. Profit for this year’s third quarter was 6 954 thousand EUR, which is an increase by 317% or 5 286 thousand EUR in comparison with the third quarter of 2018.

During the first nine months of this year Group’s sales reached 98 774 thousand EUR, which is an increase by 10% or 9 269 thousand EUR comparing to the same period of 2018. Group’s EBITDA figure during this year’s first nine months was 26 257 thousand EUR, which is by 83% or 11 928 thousand EUR more than the nine months results of the last year. Group’s reporting period profit for the nine months 2019 was 19 198 thousand EUR, which is the largest profit amount in history. Profit increased by 158% or 11 744 thousand EUR in comparison with the same period in 2018.

The reporting period profit was favorably affected by increase in gross profit by 6 624 thousand EUR, decrease in selling expense by 4 359 thousand EUR, income from foreign exchange fluctuations (2 038 thousand EUR) against losses of 1 479 thousand EUR from foreign exchange fluctuations in the nine months 2018 but was negatively affected by increase in administrative expenses.

In accordance with the approved plans Group’s sales target is fulfilled by 74% and profit figure by 151%.

As at 30 September 2019 Group has accumulated 11.4 million EUR in cash, which serves as one of the financing sources for investments in intangible assets for renewal of dossiers of all the major drugs as well as to continue investments in equipment. Group plans to continue to keep high free cash level.

Group’s main markets during the first nine months of this year are Latvia, Russia, Belarus and Ukraine, where total share is 78% of sales, which is a decline by two percentage points in comparison to the same period of the last year. All the main sales markets recorded increase except for Ukraine where decline in revenues for the three quarters this year is negligible. Group’s management is actively working to diversify sales channels by seeking beneficial cooperation partners with relevant experience and ability to advance Group’s products in markets.

During the first nine months of this year sales volumes of the main Olainfarm final dosage forms continued to increase. The share of the leading product Noofen increased to 20%, which is by one percentage point more than a year before. The share of the three largest products comprise 55% that is the same as the  year before.

At the same time in the 3rd quarter this year the best-selling product was Neiromidin with 22% share, followed by Noofen with 20% and Furamag/Furasol group with 18%.

In relation to renewal of drug dossiers Group has attracted a US based international pharma and healthcare consultancy company which reviews all major products and markets. Research results will allow Group to prepare strategy for further development and to make more precise estimates of required investment amounts and research terms.

During the third quarter of 2019, more than 565 thousand shares of JSC Olainfarm, with total value of 3.8 million euros, were traded on Nasdaq Riga. Compared to the same period in 2018, the number of traded shares was higher by 135% more, while traded value was higher by 127%. During the first nine months of this year there were 5 024 trades with 1 453 910 shares for the total value of 9.4 million EUR.

Condensed Consolidated Statement of  Financial Position

Group
30.09.2019       31.12.2018
EUR ‘000 EUR ‘000
  ASSETS
NON-CURRENT ASSETS
Intangible assets   36 550   36 619
Property, plant and equipment   44 417   43 697
Right-of-use assets   7 467   –
Investment properties   3 469   3 492
Other non-current assets   855   983
TOTAL NON-CURRENT ASSETS   92 758   84 791
CURRENT ASSETS
Inventories   28 682   25 794
Receivables   32 092   34 637
Cash   11 437   2 689
TOTAL CURRENT ASSETS   72 211   63 120
TOTAL ASSETS   164 969   147 911
  EQUITY AND LIABILITIES
EQUITY
Share capital   19 719   19 719
Share premium   2 504   2 504
Reserves   47   (224)
Retained earnings   100 868   83 079
TOTAL EQUITY   123 138   105 078
LIABILITIES
Non-current liabilities
Borrowings and lease liabilities   13 283   1 793
Deferred income   3 089   2 878
Total Non-Current Liabilities   16 372   4 671
Current liabilities
Borrowings and lease liabilities   10 565   23 236
Trade payables and other liabilities   14 305   14 540
Deferred income   589   386
Total Current Liabilities   25 459   38 162
TOTAL LIABILITIES   41 831   42 833
TOTAL EQUITY AND LIABILITIES   164 969   147 911

Consolidated statement of comprehensive income

Group Group
Q3 2019     Q3 2018    M9 2019    M9 2018
   EUR ‘000    EUR ‘000    EUR ‘000    EUR ‘000
Revenue   32 382   27 661   98 774   89 505
Cost of goods sold  (13 140)  (10 909)  (38 449)  (35 804)
Gross Profit   19 242   16 752   60 325   53 701
Selling expense   (5 335)   (8 534)   (22 356)   (26 715)
Administrative expense   (6 835)   (5 684)   (20 467)   (17 115)
Other operating income   443   542   1 577   1 947
Other operating expense   (558)   (656)  (1 262)  (2 460)
Share of profit of an associate   (11)   8   92   83
Financial income   251   18   2 093   57
Financial expense   (215)   (703)   (703)   (1 794)
Profit Before Tax   6 982   1 743   19 299   7 704
Corporate income tax   (28)   (73)   (100)   (250)
Deferred corporate income tax   –   (2)   (1)   –
PROFIT FOR THE REPORTING PERIOD   6 954   1 668   19 198   7 454
Other comprehensive income for the reporting period   54   (119)   271   (83)
Total comprehensive income for the reporting period   7 008   1 549   19 469   7 371
Total comprehensive income attributable to:
The equity holders of the Parent Company   7 008   1 549   19 469   7 371
Non-controlling interests   –   –   –   –
Basic and diluted earnings per share, EUR   0.49   0.12   1.36   0.53

JSC Olainfarm is one of the biggest pharmaceutical companies in Latvia with more than 45 years of experience in production of medication and chemical and pharmaceutical products. A basic principle of company’s operations is to produce reliable and effective top -quality products for Latvia and the rest of the world. Products made by the Group are being exported to more than 60 countries of the world, including the Baltics, Russia, other CIS, Europe, Asia, North America and Australia.

 

Additional information:   
Jānis Dubrovskis
Investor Relations Advisor of JSC Olainfarm
Phone: +371 29178878
Email: janis.dubrovskis@olainfarm.com

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Groups 9 months profit increased by 158% and exceeds 19 million EUR; active work has begun on renewal of drug dossiers

A new senior executive appointed for Olainfarm with international experience in pharmacy

on November 28, 2019

In accordance with the plan of JSC Olainfarm Supervisory Council to further strengthen the management team of the company, Jeroen Weites has been appointed as Chairman of the Management Board, CEO of Olainfarm Group, with 20 years of international experience in the pharmaceutical industry. The former CEO Lauris Macijevskis will remain on the Board of Olainfarm.

Chairman of the Board, CEO of JSC Olainfarm Group Jeroen Weites is entrusted with the overall management and strategic development of the Olainfarm Group as well as new market niche and sales market expansion.

Gundars Bērziņš, Chairman of the Supervisory Council of JSC Olainfarm, emphasizes: “We are pleased that management team is joined by such an experienced senior executive with considerable expertise in big pharma management, ensuring the companies’ chosen direction of transformation and the growth of business operating income. Europe is one of the markets where JSC Olainfarm wants to grow, while maintaining a solid position in strategically important CIS markets. I am convinced that the addition of such an experienced executive offers real opportunities for the company to develop to a new level. We greatly appreciate the contribution of the current management board under the leadership of L. Macijevskis at such a vital stage for the company and we are delighted he remains on the board. As we move forward, we intend to continue strengthening our management team.”

Chairman of the Board, CEO of JSC Olainfarm Group Jeroen Weites says: “I am delighted to have the opportunity to use my experience in business operations in Europe, CIS and Asia, when joining the Olainfarm team in such a vital stage of development. I have familiarized myself with Olainfarm’s historical success, product portfolios and performance figures, which are all impressive and we must not settle here. Olainfarm has the opportunity to not only become a success story in Latvia but in all the Baltics, where the contribution of every single employee plays a significant role.”

Under the leadership of J. Weites, more than 30 new pharmaceutical products have been successfully introduced in international markets. Jeroen Weites has been the General Manager of Global Healthcare in Sanofi, Bulgaria since 2014, and has led Sanofi’s

General Medicine South Europe (200 mio euro profit) and North Europe (165 mio euro profit) clusters, where his key task was to ensure successful transformation processes for the company. Between 2010 and 2014, he held the position of Senior Director at Sanofi Genzyme, France, primarily responsible for implementing, managing and advising on new European markets as well as developing launch strategies in Japan and China. He also previously held senior positions at UCB Pharma Brussels in Brussels, Belgium and at Biogen Idec in Boston, USA. Weites holds a Master’s degree in Economics from the University of Amsterdam.

Jeroen Weites does not own any shares at the JSC Olainfarm.

Lauris Macijevskis, Raimonds Terentjevs, Signe Baldere-Sildedze, Milana Beļeviča and Mārtiņš Puriņš remain on the Board of the JSC Olainfarm.

 

JSC Olainfarm is one of the largest companies in the Baltic States with more than 45 years of experience in production of pharmaceuticals and chemical and pharmaceutical products. The basic principle of the company is to produce reliable and effective top quality products for Latvia and the whole world. Currently, JSC Olainfarm products are exported to more than 60 countries worldwide, including the Baltic States, Russia, other CIS countries, Europe, North America, Asia and Australia.

 

Additional information: 
Jānis Dubrovskis
Investor Relations Advisor of JSC Olainfarm
Phone: +371 29178878
Email: janis.dubrovskis@olainfarm.com

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A new senior executive appointed for Olainfarm with international experience in pharmacy

JSC Olainfarm continues to improve corporate governance of the Group companies

on November 22, 2019

JSC Olainfarm continues to improve the activities of its subsidiaries by gradually introducing the principles of corporate governance in all the companies of the Group, thus strengthening the quality of governance of the Olainfarm Group. The expansion of the management board of Silvanols Ltd. and Tonus Elast Ltd. is the first step Olainfarm is taking towards signing the agreement.

Improvements to the operations of the Group companies have also led to changes in the articles of association of several Olainfarm subsidiaries, laying down uniform operating and management principles for the Group companies.

“Olainfarm is committed to complying with the principles of corporate governance in providing quality control of operations and evaluation and management of the risks associated with operations. Olainfarm is committed to protecting the rights and interests of all its shareholders, and the quality of corporate governance in the Olainfarm Group is constantly being improved. Our goal is to gradually move towards a common practice across all companies within the Olainfarm Group in order to sign a Group agreement and thereby strengthen the quality of the operations,” emphasizes Milana Beleviča, Member of the Management Board of Olainfarm.

M. Beleviča also notes that the Group agreement provides an opportunity to improve the cooperation between parent and subsidiary companies and promotes transparency and efficiency of operations. “I highly appreciate the work done so far by all of the companies’ teams within the Olainfarm Group. Our goal is to work together in order to further develop all companies within the Olainfarm Group according to the best practices in corporate governance today, ensuring sustainable growth and appropriate risk management,” says Milana Beleviča.

Since mid-November Andis Paulins has been elected to the Management Board of Silvanols Ltd. and Tonus Elast Ltd. His professional experience in organizing business management processes and financial management will ensure achievements of the above mentioned targets. Existing members of Silvanols Ltd. and Tonus Elast Ltd. continue to perform their duties as usual in the new Management Board composition.

A. Pauliņš has more than 10 years of professional experience in the financial sector and business process management, including international companies. Prior to his election to the board of Silvanols Ltd. and Tonus Elast Ltd., A. Pauliņš also operated as an independent consultant in business and asset management. In the period of the last three years he has been a Board Member at AKMENS R Ltd. and the union “Viesturdārza mājas”. A. Pauliņš does not own shares at Olainfarm.

Olainfarm Group includes Latvian green pharmaceutical company Silvanols Ltd., pharmacy chain Latvijas aptieka Ltd., elastic medical product manufacturer Tonus Elast Ltd., herbal tea and medicinal herbal powder manufacturer NPK Biotest Ltd., medical institutions Klīnika DiaMed Ltd. and OlainMed Ltd., as well as eco-cosmetics manufacturer Kiwi Cosmetics Ltd.

JSC Olainfarm is one of the largest companies in the Baltic States with more than 45 years of experience in production of pharmaceuticals and chemical and pharmaceutical products. The basic principle of the company is to produce reliable and effective top quality products for Latvia and the whole world. Currently, JSC Olainfarm products are exported to more than 60 countries worldwide, including the Baltic States, Russia, other CIS countries, Europe, North America, Asia and Australia.

Additional information:
Jānis Dubrovskis
Investor Relations Advisor of JSC Olainfarm
Phone: +371 29178878
Email: janis.dubrovskis@olainfarm.com

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JSC Olainfarm continues to improve corporate governance of the Group companies

JSC Olainfarm is currently not seeking a strategic investor

on November 13, 2019

In the public space, information has surfaced about investors who have addressed the inheritors of V. Maligins with various offers to sell or transfer shares of JSC Olainfarm.

Investors have not contacted JSC Olainfarm and the company has not taken any initiative to attract a strategic investor.  At the same time, we would like to point out that, in the cases specified in Article 61 of the Financial Instruments Market Law, shareholders are obliged to announce changes in their voting rights.

Additional information:
Jānis Dubrovskis
Investor Relations Advisor of JSC Olainfarm
Ph.: +371 29178878
E-mail: janis.dubrovskis@olainfarm.com

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JSC Olainfarm is currently not seeking a strategic investor

JSC Olainfarm suffered damages of several million euros

on October 30, 2019

Joint stock company “Olainfarm” (hereinafter – Olainfarm) at the request of the person directing the proceeding, has engaged an independent, international auditor to verify the reasonableness of business activities and payments made for marketing services realized by previous higher level management. The audit found that at the beginning of 2017 former officials of Olainfarm on behalf of the company entered into a deal with Banestar Management Limited, a company registered in Cyprus, resulting in losses of several million euros to Olainfarm. Olainfarm has turned to the State Police with a request to recognize it as a victim within a criminal proceeding that had previously been initiated. Currently the active work has been done in order to accurately assess the amount of damages caused by the previous management, which is currently estimated at about € 26 million euros. Suspicious transactions were performed from January 2, 2017 till April 4, 2019.

Olainfarm points out that work in the company do not continue certain employees who were involved in the process of concluding and implementing the above mentioned deal. Internal audits have also identified money disbursements and attempted disbursements based on forged documents. At the end of 2017, on the basis of forged documents, arrangements were concluded with the same key management personnel on payment of compensation in the event of termination of employment agreements, regardless of the reason for its termination. Such compensations range from EUR 42 000 up to EUR 144 000 per employee. Olainfarm has turned to the State Police with a request to initiate criminal proceeding.

Olainfarm continues to conduct internal audits evaluating other transactions concluded and implemented by the former higher level management in order to obtain assurance about legality and compliance with the interests of the company of these transactions.

 

JSC Olainfarm is one of the biggest pharmaceutical companies in Latvia with more than 45 years of experience in production of medication and chemical and pharmaceutical products. A basic principle of company’s operations is to produce reliable and effective top -quality products for Latvia and the rest of the world. Products made by the Group are being exported to more than 60 countries of the world, including the Baltics, Russia, other CIS, Europe, Asia, North America and Australia.

Additional information:
Jānis Dubrovskis
Investor Relations Advisor of JSC Olainfarm
Phone: +371 29178878
Email: janis.dubrovskis@olainfarm.com

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JSC Olainfarm suffered damages of several million euros

JSC Olainfarm solemnly opens their new production unit

on October 17, 2019

Today, on 16 October, and in the month of its 47th anniversary, JSC Olainfarm solemnly opens their new production unit building in which approximately 3.6 million euros have been invested for its construction and choosing equipment. JSC Olainfarm already follows the requirements of the European Union regarding the verification of final forms, and now, consequently with the opening of their new unit, is one of the first in Latvia to also be prepared for the updated requirements of the Russian Federation.

In the new production unit building, a packaging station is located where new equipment has been installed for packaging medicinal products and for following the verification requirements, as well as equipment for introducing new products into the manufacturing process and for research. A new area for packaging products, a quarantined storage warehouse for finished products and a product delivery zone have also been constructed. JSC Olainfarm has invested approximately 1.6 million euros into construction and 2 million euros for purchasing equipment, and this is including European Union funds.

Thanks to the investments of JSC Olainfarm, we managed to provide a chance for our experts to work in comfortable areas with manufacturing technologies of the latest generation. In this way, JSC Olainfarm will be able to increase its production capacity. I can proudly say that JSC Olainfarm will be prepared beforehand to follow the Russian Federation requirements regarding verification of medicinal products. Complying with these requirements will help us to remain competitive in the market outlet of the Russian Federation and in the Commonwealth of Independent States (CIS) in the future as well,” says Lauris Macijevskis, Chairman of the Board of JSC Olainfarm.

“Over the years JSC Olainfarm has been able to adopt change and develop, despite the rapid market changes and strict monitoring and safety control measures regarding the manufacture of medicinal products that Latvia had to enforce upon joining the EU . Today, JSC Olainfarm is an equal partner among other manufacturers of medicinal products in the EU and other countries in the world. Expanding the market options in the CIS countries, also in Russia, can bring an important contribution in the future not only to the company itself, but to our country as a whole, therefore strengthening the pharmacy industry that is key to Latvia’s economy,” says Ilmārs Dūrītis, the Parliamentary Secretary of the Ministry of Health.

Mārtiņš Brencis, Deputy Director at Central Finance and Contracting Agency in European Union fund system development matters: “It is always satisfying to see that a company can wisely use the options provided by EU funds in order to develop, and Olainfarm, which is already a leader of the pharmacy industry in Latvia, is a great example for this. By not settling with the results already achieved, it continued to develop by implementing new and innovative products in their manufacturing processes. This is benefitting not only the company itself, but also the country and science as a whole. With professionality, determination and persistence Olainfarm serves as a success story for using the opportunities provided by the EU funds in a company’s development and for the promotion of export.

Requirements of the European Union and the Russian Federation

In 2019, the European Union Directive on the prevention of falsified medicinal products entered into force. It lays down the requirements for performing safety inspections for all prescription-only medicinal products, which is the so-called verification. This means that there are special codes on the packaging of medicinal products which must be verified before administering these products at the pharmacy. And from 2020, the special provisions for the serialization and traceability of medicinal products will also be adopted by the Russian Federation which means that manufacturers must invest and prepare their production lines.

 

JSC Olainfarm is one of the largest companies in the Baltic States with more than 45 years of experience in manufacturing medicinal and chemical-pharmaceutical products. The company’s key work principle is manufacturing reliable and effective high quality products for Latvia and the whole world. Currently, the products of JSC Olainfarm are exported to more than 60 countries, including the Baltic States, Russia, other countries from the Commonwealth of Independent States, Europe, North America, countries in Asia and to Australia.

 

For more information:
Ieva Lapiņa-Ennīte
Phone 29375689
Ieva.Lapina-Ennite@olainfarm.com

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JSC Olainfarm solemnly opens their new production unit