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 ‘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

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