Olainfarm increases profitability and earns 7.5 million euros in nine months

on November 30, 2018

Unaudited consolidated Income Statement of JSC Olainfarm for nine months of 2018 shows that the sales of the Group have reached 89.5 million euros, which is a slight decrease by 1% compared to the same period of 2017. At the same time, the company managed to increase its profitability – in the nine months of this year, JSC Olainfarm has earned 7.5 million euros, which is an increase of 13% over the nine months of 2017.

In nine months of 2018, sales volumes continued to increase in all of its major outlets, with the exception of Russia and Kazakhstan, where sales fell by 7% and 14% accordingly. Projected Russian ruble fluctuations impacted planned decrease in sales volumes in Russia, while the increased presence in both Latvian and Belarusian markets had a positive effect on a significant increase in sales in these markets.

The biggest sales increase during the 9 months of 2018 was achieved in Tajikistan, where sales grew by 64%, and in Belarus, where sales increased by 42%. Considerable sales increase (by 17%) was also achieved in Latvia, which resulted in total sales in Latvia being comparable to those of Russia. In total in top 10 of the markets of the Group during this 9-month period The Netherlands and Turkmenistan were replaced by Poland and Tajikistan.  Major sales markets of Olainfarm in 9 months of 2018 were Russia, Latvia, Belarus and Ukraine. In reporting period, the Company was selling its products to 50 markets worldwide.

Although the sales in nine months of 2018 slightly lagged behind last year achievement, the Company managed to increase its earnings by more than 850 thousand euros. Major positive factor was that write offs of long-term assets during these nine months were smaller by more than 1.6 million euros, while the major negative change was an increase of COGS by one million euros.

While analyzing the activities of the Olainfarm Group in the 3rd quarter, it should be noted that this 3rd quarter in terms of profit is the most successful third quarter for the Company since 2015. Even despite foreign exchange loss increasing by almost 200 thousand euros, the net profit of third quarter reached 1.7 million euros, which represents an increase of 86% compared to the third quarter of 2017. Major factors influencing the profit increase were write offs of long-term investments being by 700 thousand smaller and write offs of other assets being by 400 thousand smaller than one year ago.

During the 3rd quarter of 2018, compared to the 3rd quarter of 2017, sales of the Company shrunk by less than 0.02% and reached 27.661 million euros, making this third quarter still one of the most successful in terms of sales in corporate history. Despite reduced sales to WHO program, the company has actually managed to repeat the sales volume of last year’s third quarter.

Compared to 9 months period of 2017, this year some significant changes have occurred to the sales structure of bestselling products of Olainfarm.  Remantadine and PASA are replaced by Meldonium and Memantine, Share of Noofen, soluble Furaginum and Etacizin have significantly increased, while share of Adaptol in sales of Olainfarm products has experienced some considerable reduction.

Annual meeting of shareholders of JSC Olainfarm, convened on June 5, 2018 approved operating plan of the Group for 2018. According to it, sales of the Group in 2018 are planned to be 130 million euros, but the net profit will reach 11.5 million euros. According to this unaudited report for nine months of 2018, during this period 69% of annual sales target and 65% of annual profit target is met. Management of the Company does not expect the actual revenues and earnings of the company to show any significant deviations from approved. guidance.


Condensed Consolidated Statement of Financial Position
EUR ‘000EUR ‘000
Intangible assets36 73437 034
Property, plant and equipment42 84441 892
Investment properties3 5013 526
Financial assets1 0662 609
Inventories26 35824 161
Receivables32 26734 049
Cash4 0023 158
TOTAL ASSETS146 772 146 429


Share capital19 71919 719
Share premium2 5042 504
Other components of equity (157)(74)
Retained earnings79 80275 675
TOTAL EQUITY101 868 97 824
Non-current liabilities
Borrowings9 52315 878
Deferred income2 8272 347
Total Non-Current Liabilities12 350 18 225
Current liabilities
Borrowings15 97414 013
Trade payables and other liabilities14 60815 892
Dividends payable1 549
Deferred income423475
Total Current Liabilities32 554 30 380



Consolidated statement of comprehensive incomeGroupGroup
Q3 2018Q3 2017M9 2018M9 2017
EUR ‘000EUR ‘000EUR ‘000EUR ‘000
Net revenue27 66127 66589 50590 384
Cost of goods sold(10 909)(10 921)(35 804)(34 851)
Gross Profit16 75216 74453 70155 533
Selling expense(8 534)(8 377)(26 715)(27 008)
Administrative expense(5 684)(5 423)(17 115)(16 872)
Other operating income5427321 9471 753
Other operating expense(656)(1 862)(2 460)(3 460)
Share of profit of an associate8108370
Financial income185057206
Financial expense(703)(564)(1 794)(1 904)
Profit Before Tax1 7431 3107 7048 318
Corporate income tax(73)(398)(250)(1 806)
Deferred corporate income tax(2)(17)86
Other comprehensive income for the reporting period(119)(83)
Total comprehensive income for the reporting period1 549 895 7 371 6 598
Total comprehensive income attributable to:
The equity holders of the Parent Company1 549 896 7 371 6 597
Non-controlling interests(1)1
Basic and diluted earnings per share, EUR0.120.060.530.47



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.


Unaudited consolidated 9 months Income Statement attached.



Information prepared by:

Inga Krukle
Member of the Management Board
JSC Olainfarm
Phone +371 28698449

Olainfarm increases profitability and earns 7.5 million euros in nine months