07 Jun Financial Results H1 2010
During the first semester of 2010, turmoil was created in the Greek pharmaceutical market, in anticipation of price reductions which were announced by the government at the beginning of the year but were implemented early June. Although, according to IMS data, sales of medicines from pharmacies to consumers dropped only by 0.4%, the turnover of pharmaceutical companies reported a substantial decline, due to the effort of both wholesalers and pharmacies to exhaust reserves (stock out). In particular, the weighted average decline in sales is estimated at 25%, while in the case of Lavipharm SA and Lavipharm Group, the rate was restrained at 22% and 17% respectively.
More specifically, the consolidated turnover of Lavipharm reached 101.4 million Euros compared to 122.8 million Euros for the corresponding period 2009, decreased by 17.5%. Gross profit recorded a decrease of 4.7 million Euros, amounting to 15.7 million Euros from 20.4 million Euros in the first half of 2009, while EBITDA reached 4.2 million Euros from 4.5 million Euros the corresponding period last year. In an effort to control expenses and improve results, operating costs decreased by 6.6%, mainly due to the reduction of administrative expenses. At the same time, financial expenses were reduced by 6.1% (interest expense) as a result of the conversion of short-term borrowings to long term debt. A sharp decrease is evident in financial income, mainly due to non-repetitive gains of 13.7 million Euros resulting from a debt forgiveness in the Group’s subsidiary in the USA, which improved the consolidated results of the Group in the First Half of 2009. Consequently, the figures are not comparable with this year’s consolidated results, which amounted to losses of 4.8 million Euros compared to profits of 10.9 million Euros in the last year and losses after tax and minority interest 4.9 million Euros compared to profit of 6.2 million Euros in the first half of 2009. It is worth mentioning that, despite the market liquidity crisis, the company restrained its loan obligations at the same level as 31/12/2009, while it reduced its short term liabilities by 8.8%.
Regarding the financial results of the parent company Lavipharm SA, turnover amounted to 22.7 million Euros from 29.1 million Euros in the first half of 2009 as a result of the abovementioned market situation. Results before taxes show losses of 1.3 million Euros compared to losses of 137K Euros last year, while results after taxes amounted to losses of 1.4 million Euros from losses of 400K Euros in the same period of 2009. An important development, which was announced during the Annual Shareholders’ Meeting that took place in June, is that Lavipharm’s fentanyl transdermal system has received regulatory approval in 20 European countries through decentralized procedure (DCP). National approvals are expected to be granted by the end of the year. Following that, all necessary steps will be taken for the rapid launch of the product in the local markets. Always focusing on the company’s growth and development and taking into account the current international economic and business constraints, Lavipharm proceeds carefully and diligently in all the necessary actions required to further enhance its commercial presence in Greece, and on the other hand, achieve a key position in the global pharmaceutical market.