Published: 2019-08-30 15:20:00 CEST
Olainfarm
Half Year financial report

Olainfarm Group’s financial performance in the first half reached new highs – sales were 66.4 million EUR; net profit jumps to 12.2 million EUR

  • Group sales in the first half 2019 were 66.4 million EUR, which is 7% higher than a year earlier
  • EBITDA margin for the first six month 2019 was 26%, up from 17% year ago
  • Strong liquidity and decrease in leverage support further investment needs

“Looking at the six months of Olainfarm’s financial year and its good financial position, three things should be noted: 1) the high profitability of the company; 2) a significant increase in the company’s liquidity to historically high levels; and 3) active negotiations with banks and to provide new loans. These are also key factors that provide a solid foundation for a new development stage for organising drug dossiers and conducting clinical trials for medicines,” says Lauris Macijevskis, Chairman of the Management Board of JSC Olainfarm.

During the 2nd quarter of 2019, consolidated sales of the Olainfarm Group reached 31 647 thousand EUR which is an increase by 592 thousand EUR euros or 2% if compared to similar period of 2018. In the 2nd quarter EBITDA was 6 422 thousand EUR that surpassed the figure of the 2nd quarter of 2018 by 1 497 thousand EUR or 30%. Profit for this year’s second quarter was 3 984 thousand EUR, which is an increase by 49% or 1 312 thousand EUR in comparison with the second quarter of 2018.

During the first six months of this year Group’s sales reached 66 392 thousand EUR, which is an increase by 7% or 4 548 thousand EUR comparing to the same period of 2018. Group’s EBITDA during this year’s first six months was 16 928 thousand EUR, which is by 64% or 6 589 thousand EUR more than the half year results of the last year. Group’s reporting period profit for the six month 2019 was 12 244 thousand EUR and it increased by 112% or 6 458 thousand EUR in comparison with half year of 2018. Half-year 2019 sales, EBITDA and net profit mark new record levels for the first six months period.

Reporting period profit was positively influenced by gross margin increase, selling expense decrease, income from currency rate fluctuations but negatively impacted by increase of administrative expenses. Administrative expenses rose due to investments in medicine registration dossiers and such costs may not always be possible to capitalize as well as with review of salaries and bonus payments to personnel (excluding the Supervisory Council and the Management Board).

In accordance with the approved plans for 2019 Group’s sales target is fulfilled by 50% and profit figure by 96%.

During the first six months of this year sales volumes of the main Olainfarm products continued to increase. The share of the leading product Noofen is 19%, which is by one percentage point more than a year before. The share of the three largest products (Noofen, Neiromidin and Furamag/Furasol) comprise 52% that is by one percentage point higher than a year before (51%).

In April this year JSC Olainfarm signed agreement with a unit of UN (UN Office for Project Services) about deliveries of PASS in the amount of 3 million EUR during 2019-2020, which will keep this medicine among top products also in the future.

Group introduced two new alternative performance indicators - Net debt to EBITDA ratio and Debt – Service Coverage Ratio (DSCR). Net debt to EBITDA improved from 1.4 to 0.6 and DSCR from 1.8 to 2.5.

The first half of 2019 was also significant due to rapid improvements in cash position from 2 689 thousand EUR at the beginning of the year to 10 623 thousand EUR, which allows to continue investments in updating medicine dossiers in the coming years.

During the second quarter of 2019, more than 731 thousand shares of JSC Olainfarm, with total value of 4.5 million euros, were traded on Nasdaq Riga. Compared to the same period in 2018, the number of traded shares was by 726% more, while traded value was higher by 511%.

Consolidated statement of comprehensive incomeGroupGroup
 Q2 2019Q2 2018M6 2019M6 2018
 EUR '000EUR '000EUR '000EUR '000
Revenue  31 647   31 055   66 392   61 844
Cost of goods sold  (11 818)  (12 117)  (25 309)  (24 895)
Gross Profit  19 829   18 938   41 083   36 949
Selling expense       (8 740)  (9 510)     (17 021)  (18 181)
Administrative expense       (7 299)  (5 790)     (13 632)  (11 431)
Other operating income  672   687   1 134   1 405
Other operating expense          (449)  (1 093)          (704)  (1 804)
Share of profit of an associate  25   7   103   75
Financial income  279   19   1 842   39
Financial expense          (327)  (501)  (488)  (1 091)
Profit Before Tax  3 990   2 757   12 317   5 961
Corporate income tax              (5)  (87)            (72)  (177)
Deferred corporate income tax  (1)  2   (1)  2
PROFIT FOR THE REPORTING PERIOD  3 984   2 672   12 244   5 786
Other comprehensive income for the reporting period  62   41   217   36
Total comprehensive income for the reporting period  4 046   2 713   12 461   5 822
Total comprehensive income attributable to:    
The equity holders of the Parent Company  4 046   2 713   12 461   5 822
Non-controlling interests  -   -   -   -
     
Basic and diluted earnings per share, EUR  0.28   0.19   0.87   0.41


Condensed Consolidated Statement of  Financial PositionGroup
  30.06.201931.12.2018
  EUR '000EUR '000
   ASSETS  
NON-CURRENT ASSETS  
Intangible assets  36 388   36 619
Property, plant and equipment  44 832   43 697
Right-of-use assets  7 230   -
Investment properties  3 510   3 492
Other non-current assets  868   983
 TOTAL NON-CURRENT ASSETS  92 828   84 791
CURRENT ASSETS  
Inventories  29 744   25 794
Receivables  29 785   34 637
Cash  10 623   2 689
 TOTAL CURRENT ASSETS  70 152   63 120
TOTAL ASSETS  162 980   147 911
   
   EQUITY AND LIABILITIES  
EQUITY  
Share capital  19 719   19 719
Share premium  2 504   2 504
Reserves  (7)  (224)
Retained earnings  93 914   83 079
 TOTAL EQUITY  116 130   105 078
LIABILITIES  
Non-current liabilities  
Borrowings and lease liabilities  6 590   1 793
Deferred income  3 418   2 878
 Total Non-Current Liabilities  10 008   4 671
Current liabilities  
Borrowings and lease liabilities  19 015   23 236
Trade payables and other liabilities  16 047   14 540
Dividends payable  1 409   -
Deferred income  371   386
 Total Current Liabilities  36 842   38 162
 TOTAL LIABILITIES  46 850   42 833
TOTAL EQUITY AND LIABILITIES  162 980   147 911

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
Ph.: +371 29178878
E-mail: janis.dubrovskis@olainfarm.com

Attachment


Olainfarm_ll_2019_consolidated FS_ENG.pdf