Olaine, May 31, 2016

Consolidated sales of Olainfarm in First Quarter Reached 26.1 Million Euro

Consolidated sales of AS Olainfarm during the first quarter of 2016 were 26.1 million euros, which represents a reduction by 3% compared to the same period one year ago. The net profit during this period was 3.1 million euros, which is a reduction by 52% compared to first quarter of 2015.  Provisions of 1 million euros have been made for receivables from Ukrainian partners. The major sales markets during this period were Latvia, Russia, Ukraine and Belarus.

„This year has started with rather unpredictable environment in several CIS countries, where we see worsening of economic situation, governmental activities targeted at protection of local markets and support of local producers.  Several of these activities have influences our sales adversely.  Therefore we plan to place part of production in these countries of acquire a daughter company there, which would allow at least partially mitigating the effects,” says Valerijs Maligins, Chairman of the Board of AS Olainfarm.

During the 1st quarter of 2016 sales to all company’s main markets continued increasing except for Russia, where they shrunk by 38%, compared to 1st quarter of 2015.  This fact, combined with good sales growth in Latvia, has made Latvia to be the biggest market for the Group during 1st quarter of 2016. The most rapid sales increase has been achieved in Poland, where sales grew by 181%.  Sales to Turkmenistan grew by 162%, Sales to Uzbekistan grew by 134% and sales to Belarus grew by 77%. 

During this period significant changes have occurred to the structure of bestselling products, as Adaptol has become the bestselling product, leaving a long term leader Neiromidin in the second place. Share of the bestselling products has also levelled out as no product makes up more than 15% of Olainfarm sales. Overall concentration of sales has also improved, as ten bestselling products make up only 89 % of sales.

During the reporting period, registration processes continued in Turkey, Bosnia and Herzegovina, Myanmar, Cameroon and Vietnam. Registration of several products has been successfully completed in Estonia, Turkmenistan, Bosnia and Herzegovina. Laboratory research has been completed for new product “Ibuprofen Antigripp”, two new final dosage forms developed for Ranitidine, scheduled for registration by the end of 2016. Work continues at developing new final dosage forms of anti-tuberculosis products.

It is proposed, that Annual meeting of shareholders of A/s “Olainfarm” to be convened on June 7, 2016 approves operating plan of the Group for 2016.  According to it, sales of the Group in 2016 are planned to be 100 million euros, but the net profit will reach 10 million euros.  According to this unaudited report for 1st quarter of 2015, during the first three months 26% of annual sales target and 31% of annual profit target is met.