News

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 ‘000EUR ‘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

GroupGroup
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

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