Lavipharm – Financial Results of 9M 2012

Lavipharm – Financial Results of 9M 2012


Recession and instability features were evident in the Greek economy during 9M 2012, while in Healthcare, variability and constant changes influenced the whole sector. Within this negative business environment, Lavipharm focused on enhancing its export activity and strengthening its competitiveness, through the further decrease of operational costs and increased productivity.

In 9M 2012, consolidated financial results were significantly affected by the reduced pharmaceutical prices and by the suspension of Lavipharm’s wholesaling activity, LAS, aiming to decrease its market exposure in view of the turbulence in the sector which commenced the previous year. In that context, Lavipharm’s consolidated turnover dropped to € 28.3 million (from which only € 3.1 million originated from LAS) compared to € 138.5 million in 9M 2011 (from which € 108.5 million originated from LAS). On the contrary, the profit margin has been significantly increased, since most of the sales are generated from commercial activity and not from the wholesaling business, where margins have been diminished. It is worth mentioning that exports show an increase compared to 9M 2011, mainly due to fentanyl patch’s sales out of Greece; they have quadruplicated compared to 9M 2011.

The continuing efforts for lowering costs led to a 21.9% decrease in operating expenses. Nevertheless, the drop of sales has affected the consolidated EBITDA, which decreased to € 1.1 million from € 4.5 million in 9M 2011. It is worth mentioning that despite the harsh economic environment, Lavipharm Group has reduced its loan obligations by 12.5%, lowering this way its financial expenses, in a period where average financial costs have increased significantly. Consolidated losses reached € 8.0 million from € 5.7 million in 9M 2011 and losses after taxes and minority interests € 6.6 million from € 4.9 million in the same period last year.

Finally, despite the parent company‘s (Lavipharm SA) high Shareholders’ Equity (€ 91.3 million), consolidated Shareholders’ Equity has turned negative by € 5.6 million, due to the consolidation of accumulated over the years subsidiaries’ losses. Management is focusing on improving the Group’s profitability and enhancing Shareholders’ Equity.

Regarding the financial results of the parent company Lavipharm SA, turnover has been reduced to € 30.2 million from € 36.7 million in 9M 2011, resulting primarily from the decrease in local sales of pharmaceuticals, due to the obstacles created in the Health Sector (reduced prices, pharmacy strikes, non-execution of prescriptions etc.). Nevertheless, Gross Profits have been significantly improved compared to those of 9M of 2011, mainly due to the export sales, which led to a much higher EBITDA (€ 3.0 million from €1.6 million in 9M 2011). The latter resulted to the significant decrease of losses after taxes, which dropped to € 816K from € 2.246K in 9M 2011.

Focusing on restraining operating costs, simplifying the company’s structure and the targeted growth and given the current international economic and business constraints, Lavipharm carefully and diligently proceeds with all the necessary actions required to continue enhancing and establishing its position as a key player in the global pharmaceutical market, as well as strengthening its commercial presence in Greece.