Updated financial guidance of JSC Olainfarm provides that unconsolidated sales of the company in 2013 will reach 45.4 million lats (64.6 million euro), while consolidated sales will be as high as 52.8 million lats (75.1 million euro). Consolidated profit is expected to be at 8.8 million lats (12.5 million euro), while unconsolidated profit will reach 7.5 million lats.
Initial financial guidance was approved on April 12, 2013, they were revised and presented in December 10, during the webinar conference hosted by Salvis Lapins, member of company’s Management Board. Financial guidance was adjusted after more precise data became available on November sales. Although the sales in November were rather good, they were still too small to reasonably expect that the initial financial targets will be attained.
Since sales of JSC Olainfarm have a rather clear seasonality, and traditionally it is third and fourth quarters, especially November and December when sales are particularly and sometimes unusually high, the probability of actually reaching the initial guidance remained reasonable up until when November sales figures became apparent. Although sales to Ukraine were improved significantly, bigger sales improvements to other countries were required in order to reach the initial financial targets.
Since JSC Olainfarm is a company with a large base of employees and fixed assets, its has a comparatively high break-even point. It implies that when company’s sales are growing, its profits grow disproportionally and also, when company’s sales are not reaching the expected levels, the profit is also corrected disproportionally. Therefore profit guidance of JSC Olainfarm for 2013 has been reduced by a bigger factor than the sales guidance.
JSC Olainfarm is one of the biggest pharmaceutical companies in Latvia with 40 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 35 countries of the world, including the Baltics, Russia, other CIS, Europe, Asia, North America and Australia.
Information prepared by:
Member of the Board
Tel: +371 6 7013 717
Cell: +371 2 6448 873