H1 2009 Results Announcement of EastPharma Ltd.
(Thomson Reuters ONE) - H1 2009 Results Announcement of EastPharma Ltd.EASTPHARMA LTD.London, 19 August 2009 - EastPharma (EAST LI), a company active inthe manufacturing and marketing of branded generic and in-licensed,original, pharmaceutical products in Turkey and other regionalmarkets, today announces its H1 2009 reviewed consolidated financialresults.* Sales in H1 2009 increased by 35% to USD 132.2mn versus USD 97.6mnin H1 2008.* Sales of Roche products amounted to USD 34.6mn in H1 2009.* Gross profit reached USD 62.4mn, corresponding to an increase of72% on a year over year basis.* Gross profit margin according to IFRS results reached 47% in H12009 from 32% at the end of the year 2008 and from 37% in H1 2008.* EBITDA reached USD 22.7mn in H1 2009.* Adjusted EBITDA (excludes certain items in other gains and lossesand general administrative expenses) realized as USD 31.1mn in H12009, which corresponds to an adjusted EBITDA margin of 23% versusthe negative result at the end of the year 2008 and in H1 2008.* Net Profit in H1 2009 reached USD 2.9mn versus a net loss of USD8.9mn in H1 2008.* Improvement in receivables and inventory turnover days compared toyear end 2008: - Decrease in receivable turnover days to 127 days in H1 2009 from201 days at the end of the year 2008. - Decrease in inventory turnover days to 150 days in H1 2009 from170 days at the end of the year 2008.* Market share in unit terms decreased to 4.7% in H1 2009 versus 5.8%in H1 2008, according to IMS Healthcare data.* Exchange rate fluctuation had a negative impact in EastPharmafinancials. Average TRY/USD foreign exchange rate increased by 31% inH1 2009 compared to the same period in 2008.Detailed financial statements of EastPharma are provided in theattachment and a presentation on results will be available on theEastPharma website www.eastpharmaltd.com on 21st of August, 2009.A conference call to review the H1 results with EastPharma managementwill be held at 4:45pm London time on 21st of August, 2009 (11:45amUS East Standard Time / 6:45pm Istanbul time). Dial-in details areprovided below.Conference call:Dailed-in Number (UK): +44 (0)20 7162 0077Dailed-in Number (US): +1 334 323 6201Dailed-in Number (Switzerland): +41 (0)2 2592 7007Dailed-in Number (Germany): +49 (0)695 8999 0507Conference ID: 843786For further information, please contact:EastPharma Ltd.Idil Bora - Investor RelationsTel.: + 90 (212) 6929326Market Growth and EastPharma Sales Performance in the H1 2009according to IMS Healthcare data:The Turkish Pharmaceutical Market showed 2.46% growth in unit terms,19.28% growth in TRY value terms, and a decrease of 8.86% in USDvalue terms during H1 2009 compared to H1 2008.EastPharma sales according to IMS Healthcare data in H1 2009 declinedby 16.89% in unit terms, grew by 1.71% in TRY value terms anddeclined by 22.53% in USD value terms compared to H1 2008.EastPharma's market share in H1 2009 was 4.7% in unit terms versus5.8% in H1 2008. EastPharma's market share in H1 2009 was 3.4% in TRYvalue terms, while it was 4.0% in H1 2008.The therapeutic breakdown of the total sales of EastPharma productsin H1 2009 in unit terms was; Systemic Anti-infectives 30.2%,Musculo-Skeletal System 19.4%, Alimentary T. & Metabolism 13.1%,Cardiovascular System 11.6%, Respiratory 6.1%, Dermatology 5.8%,Nervous System 5.1%, G.U. System & Sex Hormones 4.9%, Antineoplast +Immunomodul 0.2%.Comments on financial performance and business developments forEastPharma in H1 2009:The revenues reached to USD 132.3mn in H1 2009, showing a 35%increase when compared to the same period in 2008. The contributionof Roche products amounted to USD 34.6mn in H1 2009. In H1 2009, Devahuman pharma net sales (excluding Roche products) increased by 36% inTRY terms and Saba net sales increased by 55% in TRY terms comparedto same period in 2008. However, net sales improvements in TRY termsboth in Deva human pharma (excluding Roche products) and Saba did nothave a strong positive impact in EastPharma revenues due to theincrease in average TRY/USD foreign exchange rate by 31% on a yearover year basis.Margins improved as the efficiency in sales increased. The grossprofit margin according to IFRS results reached 47% in H1 2009,whereas it was 32% in 2008. Product acquisition from Roche and thenew product launches had positive effects on the gross profit margin.Gross profit was USD 62mn which corresponds to an increase of 72% ona year over year basis. EBITDA reached USD 22.7mn in H1 2009, whileadjusted EBITDA (excludes certain items in other gains and lossesand general administrative expenses) was USD 31.1mn, whichcorresponds to an adjusted EBITDA margin of 23% versus a negativeresult at the end of the year 2008 and also in H1 2008. This shows animportant increase in operational performance and our constructiveeffort in this regard continues.Another improvement can be seen in the expense accounts. Operatingexpenses decreased by 18% on a year over year basis to USD 46.8mnfrom USD 57.2mn, which shows an improvement from 59% to 35% inpercentage terms of the total operating expenses to the net sales.Marketing and sales expenses as a percentage of the total operatingexpenses have decreased to 58% in H1 2009, which was 67% in H1 2008.The finance cost was USD 14.0mn in H1 2009, which shows a decrease of42% on a year over year basis.The company's net profit is USD 2.9mn in H1 2009 versus the net lossof USD 8.9mn in H1 2008.There is a significant improvement in reducing receivables andinventory turnover days compared to year-end 2008. Receivablesturnover days in H1 2009 decreased to approximately 127 days levelwhereas it was around 201 days at the end of the year 2008. Theinventory turnover days decreased to 150 days compared to the 170days at the end of the year 2008.Reconciliation of Adjusted EBITDAEastPharma uses Adjusted EBITDA to manage its operations asmanagement believes it is indicative of underlying operations.Adjusted EBITDA includes the adding back of the following:USDNetprofit 2,907,599Finance costs, investment revenue, income taxes,depreciation and amortization 19,772,081Provisions (tax provisions * and restructuring of personnel andothers) 4,120,077Fair value of call option liability 3,988,394Foreign exchangeloss 285,646AdjustedEBITDA 31,073,797*In Q2 2009, Deva Holding received a tax penalty from tax authoritiesas a result of a general inspections in the pharma market in Turkey.Total amount of USD 3.4mn has been reserved as provision for taxpenalty on accounts. The fine has been appealed and the legalprocedures are being followed by Deva Holding.Update on investments:The most recent update on the facilities is that the successfulMinistry of Health approval of the Cerkezkoy Main Production buildingfor oral dosage forms was received on April 24th, 2009. The liquidsand semi-solids lines have been successfully inspected by theMinistry of Health in first half of July. The approval of the liquidsand semi-solids facility will close supply gaps for syrups,ointments, creams and suppositories, since we had to rely on bridgingstock for almost one year. The announced investment of approximatelyEUR 5mn into new equipment including a bigger granulation line,faster tablet production line, faster and more flexible packaginglines for blisters and bottles, including finished product packagingand case packing is currently being implemented and is advancing asplanned with the first machines already delivered and installed inthe new Cerkezkoy facility. This investment will help to overcomebottlenecks in granulation and packaging and to better meetincreasing sales demand. The machines will be equipped with state ofthe art control systems to ensure product quality and effectiveprocesses with higher output and less waste.On 8th of July 2009, Deva Holding announced the creation of its newResearch and Development Center called "DEVARGE". While this new R&Dcenter shall be a separate unit within the Cerkezkoy productionfacility complex, it shall be the centralized hub of our R&Doperations and supported by the research teams in the Topkapi andIzmit production facilities. Deva Holding's new R & D center'DEVARGE' is an important step in our growth strategy. The new R&Dcenter will help Deva Holding to increase the number of its own, newproduct launches in the future.Outlook for 2009:While the first half results indicate a marked improvement in theoperating performance of the company over 2008, the delay in the MOHapproval of the main production building meant that the move from theTopkapi factory to the new building was delayed accordingly and tookonly place during the second quarter of this year. This means thatour operating costs during the second quarter still included somemoving costs. On the other hand, the organization had to adapt itselfto production short falls in several areas, which made the task ofour sales and marketing force a rather difficult one and we lostsignificant sales volumes in the first half due to productionshortfalls caused by the move and subsequent need for re-registrationof the products. The task involved in moving the production machinesand re-registering the products was a daunting one and it is anabsolute credit to our production and regulatory staff, that thisprocess was done within the extremely short deadlines and that notmore loss of sales was incurred.As of today, we can say that the painful period of moving from ourold facilities to our new facilities is accomplished and that we arecurrently fine tuning all production processes and that major stockouts will be avoided as from the fourth quarter of this year.With the elimination of the above mentioned production issues, we areconfident to recuperate sales lost during the past 2 years and this,combined with the introduction of new products, will assure a betterperforming top line.There are currently talks between the Turkish government and thepharmaceutical industry to explore ways how to address the ballooningbudget deficit. Discussed solutions range from a general pricedecrease to a sharing of the surplus pharma deficit by thepharmaceutical sector. While no agreement has been reached yet, it isclear that prices will come under pressure in the near future.As a first measure, the government has reduced the reimbursement bandfrom 22% to 15% as of 1 August 2009. While this is not immediatelyaffecting our pricing, it means at the very least, that co-paymentsby the patients increase, which will likely have a negative impact onour volumes and over the medium term we might also be forced toreduce our prices.The pricing developments in the domestic market make our efforts toexport even more important and we forecast significant developmentsin this respect during the next year.In H1 2009, the budget realization was around 85%. Due to above givenfacts and budget realization ratio in H1 2009, we had to revise ourbudget forecasts for the full year 2009. We forecast around 20%decrease in our original budgeted net sales and EBITDA figures whichcorresponds to new budget of TRY 400mn in net sales and TRY 80mn inEBITDA for the full year 2009.---END OF MESSAGE---http://hugin.info/138031/R/1335966/317700.pdfThis announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
Datum: 19.08.2009 - 19:17 Uhr
Sprache: Deutsch
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