Published: 2019-11-19 08:19:00 CET
Inside information

In October revenues increased by 57%, partners in Russia prepare for the next year’s requirements

JSC Olainfarm preliminary consolidated results for October 2019 indicate that revenues increased by 57% compared to the same month last year and reached 20 million euro. At the same time consolidated results for the first ten months of 2019 show that revenues reached 118.9 million euro which is an increase by 17%, compared to the ten-month period of 2018. Extraordinary rapid increase in sales was in Russian, Belarus and Tajikistan markets. Products of Olainfarm Group during this period were sold in 54 markets worldwide.

Consolidated sales in October show revenue increase in eight out of ten main markets. In Russia sales grew by 165%, in Latvia by 8%, in Belarus by 25%, in Kazakhstan by 4%, in Tajikistan by 187%, in Georgia by 261%, in Poland by 20%, in the Netherlands by 2999% where sale in October last year were almost nonexistent. Drop in sales was recorded in Ukraine by 5% and in Uzbekistan by 8%.

During the second half of this year rapid increase in sales to Russia is related to implementation of new regulatory requirements. Starting from January next year all packages of medical products must be traceable at every supply chain stage therefore each package must contain a unique serial number. The largest distributors of JSC Olainfarm have purchased additional inventory of pharmaceuticals and plan to sell it during the next year, thus JSC Olainfarm expects drop in sales to Russia in December this year and during the 1st quarter 2020.

In the ten months of 2019, contribution of the main sales markets of Olainfarm Group increased to 79% of the total revenue – Russia had the largest share of 33%, Latvia – 27%, Belarus – 12% and Ukraine – 8%. and Russia’s share was 28%, Belarus (12% share) and Ukraine (8% share). The Group’s other major sales markets include Kazakhstan, Uzbekistan, the Netherlands, Germany, Tajikistan and Lithuania. The most rapid sales growth during this ten-month period was achieved in the Netherlands, where sales grew by 214% compared to the last year, and in Uzbekistan where sales grew by 39%. Sales in Russia improved by 30%, in Latvia by 12%, in Belarus and in Kazakhstan by 11%, in Germany by 4% and in Tajikistan by 34%. Amongst the largest sales outlets a decline was marked in Ukraine (-1%) and in Lithuania (-21%).

“The Company shows strong sales results also in October. The rapid growth in Russian markets is mainly due to Russia’s new verification of medicinal products, which will come into effect from January 2020. Collaboration partners are making stocks in warehouses, so we expect sales in these markets to be lower in the first months of next year. It should be emphasized that JSC Olainfarm is timely prepared to follow the Russia requirements regarding verification of medicinal products. Complying with these requirements will help us to remain competitive in the market outlet of the Russia and in the Commonwealth of Independent States (CIS) in the future as well,” says Lauris Macijevskis, Chairman of the Board of JSC Olainfarm.

October 2019, consolidated sales  Sales, thous. EURShare in total salesChanges to October 2018
Russia10 34852%165%
Latvia3 64918%8%
Belarus1 8779%25%
Ukraine1 0935%-5%
The Netherlands1801%2999%
Other1 1886%-25%
Total20 024100%57%

10 months 2019, consolidated sales Sales, thous. EURShare in total salesChanges to 10 months 2018
Russia 39 32133%30%
Latvia32 02427%12%
Belarus13 78312%11%
Ukraine9 2148%-1%
Kazakhstan3 0883%11%
Uzbekistan2 8032%39%
Netherlands1 9822%214%
Germany1 6721%4%
Tajikistan1 5891%34%
Lithuania1 2411%-21%
Other12 10410%8%
Total118 821100%17%

Unconsolidated sales – October and 10 months

According to preliminary unconsolidated figures, JSC Olainfarm sales reached 16.9 million euros in October, which represents an increase by 73% compared to October, 2018. Sale of products improved in Russia (+194%), Latvia (+3%), Belarus (+25%), Kazakhstan (+1%), Tajikistan (+165%), Georgia (+214%), Poland (+119%) but in the Netherlands (+2999%). There was decline in sales to Ukraine and Uzbekistan by 5% and 8%.

The unconsolidated sales results for the first ten months of 2019 show that JSC Olainfarm sales reached 91.8 million euros, which represents an increase by 19% compared to the first ten months of 2018. During this reporting period, sales have increased in nine out of the ten major markets of Olainfarm – Russia (+39%), Latvia (+3%), Belarus (+8%), Uzbekistan (+39%), the Netherlands (+214%), Kazakhstan (+1%), Germany (+4%), Tajikistan (+30%) and in Italy (+50%). Revenues declined by 3% in Ukraine.

October 2019, unconsolidated sales Sales, thous. EURShare in total salesChanges to October 2018
Russia9 97359%194%
Latvia1 64510%3%
Belarus1 5659%25%
Ukraine1 0886%-5%
The Netherlands1801%2999%
Other1 0076%-26%
Total16 892100%73%

Ten months 2019 unconsolidated sales Sales, thous. EURShare in total salesChanges to ten months 2018
Russia36 36340%39%
Latvia14 54616%3%
Belarus11 20312%8%
Ukraine8 94510%-3%
Uzbekistan2 8033%39%
The Netherlands1 9822%214%
Kazakhstan1 8832%1%
Germany1 6582%4%
Tajikistan1 5122%30%
Italy1 1661%50%
Other9 75311%2%
Total91 814100%19%

Results of subsidiaries – October and the first ten months of 2019

The pharmacy chain SIA Latvijas Aptieka sales reached 2.4 million euros in October 2019, which represents a 17% increase compared to October 2018. 68 pharmacies were operating during this period. SIA Silvanols sales reached 0.6 million euros in October 2019, representing a decrease by 8% vs. October 2018. The combined sales of Tonus Elast and Elast Medical in October 2019 were 0.9 million euros, which is by 12% less than this time last year. Olainmed and Diamed Medical Center sales reached 0.3 million euros, while the Belarus subsidiary NPK Biotest reached 0.3 million euros in sales in October that is higher by 49% than in October last year.

During the first ten month period of 2019, SIA Latvijas Aptieka sales amounted to 21.5 million euros, demonstrating an 8% increase in comparison to the same time period last year. Sales of SIA Silvanols reached 4.8 million euros which is 3% less than last year. The combined sales of Tonus Elast and Elast Medical during ten months this year totaled 8 million euros which is a drop by 1%. Medical Centers Diamed and Olainmed revenues were 2.6 million euros during the first ten months of this year and the Belarus company NPK Biotest sales were worth 2.6 million euros, improving the result of the last year by 35%.

 October 2019 10 months 2019
Sales markets of Olainfarm3345
Sales markets of the Group3854
Number of pharmacies68 
Sales of Latvijas Aptieka, thous. EUR2 36121 532
Sales of Medical centers, thous. EUR2952 611
Sales of NPK Biotest, thous. EUR3002 559
Sales of Tonus Elast and Elast Medical, thous. EUR9248 062
Sales of Silvanols, thous. EUR6434 827

According to the JSC Olainfarm budget, unconsolidated sales are planned to reach 99 million euros in 2019, while consolidated sales are expected at 133 million euros.  According to these preliminary sales figures, in the first ten months of 2019, 93% of annual target for unconsolidated sales and 89% of annual target for consolidated sales have been reached.

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