Olaine, August 31, 2015

Profit of Olainfarm in Six Months Reaches 9.3 Million Euros

Unaudited profit and loss account of AS Olainfarm for six months of 2015 shows that the Group has made a net profit of 9.3 million euros, while sales reached 50 million euros. Net profit has increased by 4%, while the sales have increased by 3%, compared to the same period of 2014, making this the best first six months in corporate history so far, both in terms of sales and in terms of profit. The major sales markets of AS Olainfarm during this period were Russia, Latvia, Ukraine, The Netherlands and Belarus.

„ Taking into consideration the geopolitical reality, a further diversification of sales markets increasingly is a priority. During 2015 and subsequent years company plans to continue all efforts targeted at implementation of new products, entering new markets, making a little more emphasis on cooperation with other producers in distribution of their products on CIS and other markets. After the end of the reporting period, the exports were commenced to Mongolia, registration processes in Turkey and other countries are successfully continuing. More attention is being paid to possible acquisition of a company, whose sales markets or products are significantly different ours, which would help us expand our sales geography,” says Valerijs Maligins, Chairman of the Board.

During the six months period the company has made provisions of more than 1.5 million euros for receivables and currency risks.

During the first half of 2015 Company’s sales grew in Russia, Latvia, The Netherlands, where the anti-tuberculosis products is shipped for the needs of the World Health Organization (WHO), Kazakhstan, Tajikistan, Lithuania and other markets, while in Ukraine, Belarus, UK and Uzbekistan they shrunk. In general, the sales split between countries has remained relatively unchanged, and reduction of Russia’s share from 37% to 34% is really the only significant development.  In total, during six months of 2015, AS Olainfarm was selling its products to 37 countries on five continents.

During the reporting registration processes have been launched in Bosnia And Herzegovina; Vietnam, Myanmar; GMP audit by Turkish authorities has been passed, allowing the company to proceed with registration in Turkey.. New forms have been developed for Gripoflex 325 (with reduced content of paracetamol), ACC 200mg powder, and lactose free Memantine tablets of 10mg and 20mg. The work continues at development of new combined prolonged activity form of nitrofurantoin. Two new food supplements have been developed and registered in Baltic countries with urological and hepatological application.

Annual meeting of shareholders of A/s “Olainfarm” held on June 11, 2015 approved operating plan of the Group for 2015.  According to it, sales of the Group in 2015 are planned to be 100 million euros, but the net profit will reach 15 million euros.  According to this unaudited report for 1st half of 2015, during the first six months 50% of annual sales target and 62% of annual profit target is met.