|Emitents||Olainfarm, AS (213800WCG52W62ENOP27)|
|Veids||1.1 Gada finanšu pārskati un revīzijas ziņojumi|
Olainfarm’s revenues continue to increase; EBITDA margin improves
Audited consolidated revenues of JSC Olainfarm for 2018 exceeded 124 million euros. This represents an increase by 2% compared to sales of 2017 and is the new record in the company's history. The profit before tax of Olainfarm Group last year reached 11.4 million euros, which is 21% more than a year before.
Olainfarm Group sold its products in 54 countries. Besides smaller (by 10% or by 4.0 million euros) sales to Russia, all the other main markets demonstrated sales increases – Belarus (+52%), Tajikistan (+32%), Latvia (+23%), making the home market the second largest in terms of turnover after Russia. Major sales markets of the Group in 2018 were Russia, Latvia, Belarus and Ukraine reaching 79% of total sales. During the previous year, Olainfarm enhanced the product portfolios in already existing export markets as well as started the sale of chlorobutanol in China, and started export to new markets such as Portugal, Slovakia, Jordan, Bangladesh. Meldonium and Memantine became one of the Top 10 selling products, while shares of the most revenue generating products Noofen and Neiromidin were balanced.
Profit before tax, and before financial income, financial expense, depreciation and amortisation of intangible assets and property, plant and equipment (EBITDA) increased during the last quarter 2018, which improved trailing twelve months EBITDA to 21 million euros and EBITDA margin in 12 months period has also gained 2 pp to 17%. Both these indicators are the highest since early 2016. Net profit was 10.7 million euros, which is the same as in 2017.
By the end of 2018, Olainfarm Group managed to significantly decrease its interest-bearing debt to 25 million euros or by 16%. This is due to a fact that during 2018 no acquisitions occurred and the Group’s operating cash flow was sufficient to fund capital expenditures and repay bank borrowings. As at 31 December 2018 net debt was 22.3 million euros or around 1.07 times EBITDA.
In 2018 operating cash flow before working capital changes improved by 2.2 million euros year-on-year or 14% to 18.3 million euros. During the same period changes in working capital and corporate income tax paid decreased net cash flows from operating activities by 2.0 million euros or 12% to 15.7 million euros.
Last year Olainfarm Group continued investments in intangible assets and property, plant and equipment. In total, almost 8 million euros were invested, which is by 1.1 million or 16% more than a year ago.
In 2018 Olainfarm paid close to 3 million euros or 0.21 euros per share in dividends from the net profit of 2017. Basing upon the results reflected in this annual report and upon the plans of the Group for 2019, the Management Board recommended the shareholders to decide on paying 1.4 million euros in dividends from earnings of 2018 or 0.10 euros per share.
Olainfarm’s newly established Business Development Division is tasked to draw up a long-term development strategy that will strengthen the competitiveness of the company at the global pharmaceutical market on the basis of strengths and knowledge of Olainfarm. Management of the Group is currently reviewing strategic options to further diversify revenues, boost profitability and to improve risk profile. This might result in starting operations in new segments either organically or through acquisitions.
During 2018, new registration processes for the Parent Company’s products were completed in Azerbaijan and Mongolia. Registration of two medicines produced by NPK Biotest in Belarus has also been completed. Registration processes are still ongoing in Turkey, Zimbabwe and Zambia.
The Parent Company by the end of 2018 completed four EU co-financed research projects in cooperation with Competence Centre of Pharmaceutical, Biomedical and Medical Technology: Drug safety and toxicokinetic study; Research of natural substances for development of new cosmetic product line; Development of a new anti-tuberculosis final dosage form; Development of new manufacturing technology for the racemic derivative of the Hinuclidine.
The Parent Company also continued implementation of EU co-financed project Experimental Technology Implementation for New Products Manufacturing in JSC Olainfarm with planned project completion in August, 2019. Main target of project is development of experimental production line with its supporting laboratory equipment for a new final dosage medicine for treatment tuberculosis and other new products.
Although the overall number of sales markets is increasing and sales diversity is improving, achieving even greater variety in sales geography, diversification of the markets remains one of the main challenges for the Group. One of priorities in 2019 and further years is to conduct additional clinical and preclinical research of top products not only to secure the presence of existing products in existing markets, but also to make accessibility to other markets easies in future. Since this research program is rather sizeable, it will remain among company’s priorities for the next two years. The Parent Company has already started EU co-financed 3 years project on Pre-clinical and Clinical Studies of Medicinal Products in total amount of 3.4 million euros.
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.
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