9M 2009 Results Announcement of EastPharma Ltd.
(Thomson Reuters ONE) - 9M 2009 Results Announcement of EastPharma Ltd.EASTPHARMA LTD.London, 13 November 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 9M 2009 reviewed consolidated financialresults.* Sales in 9M09 increased by 16% to USD187.3m versus USD160.8m in9M08.* Gross profit in 9M09 was USD88.1m, corresponding to an increase of46% on a year over year basis.* Gross profit margin (IFRS) was 47% in 9M09, up from 32% for 2008and from 37% in 9M08.* EBITDA reached USD39.8m in 9M09.* Adjusted EBITDA (excludes certain items in other gains and lossesand general administrative expenses) reached USD43.9m in 9M09. Thiscorresponds to an adjusted EBITDA margin of 23% versus 5% in 9M08.* Net Profit in 9M09 was USD10.5m versus a net loss of USD9.4m in9M08.* Market share in unit terms decreased to 4.7% in 9M09 versus 5.6% in9M08, according to IMS Healthcare data.* Exchange rate fluctuation had a negative impact in EastPharma'sfinancials. The average TRY/USD foreign exchange rate increased by29% in 9M09 compared to the same period in 2008.Detailed financial statements of EastPharma are provided in theattachment and a presentation of the results will be available on theEastPharma website www.eastpharmaltd.com on the 16th of November,2009.A conference call to review the 9M results shall be hosted by themanagement of EastPharma at 4:45pm London time on 16th November, 2009at 11:45 a.m. U.S. Eastern Standard Time / 6:45pm Istanbul time). Thedial-in details are provided below.Conference call:Dial-in Number (UK): +44 (0)20 7162 0077Dial-in Number (US): +1 877 491 0064Dial-in Number (Switzerland): +41 (0)2 2592 7007Dial-in Number (Germany): +49 (0)695 8999 0507Conference ID: 850503For further information, please contact:Idil Bora - Investor RelationsEastPharma Ltd.Tel.: + 90 (212) 6929326Market Growth and EastPharma Sales Performance in the 9M09 accordingto IMS Healthcare data:The Turkish Pharmaceutical Market showed 2.20% growth in unit terms,18.21% growth in TRY value terms and a decrease of 7.98% in USD valueterms during 9M09 compared to 9M08.EastPharma sales, according to IMS Healthcare data, in 9M09 declinedby 14.60% in unit terms, grew by 3.88% in TRY value terms anddeclined by 19.31% in USD value terms compared to 9M08.EastPharma's market share in 9M09 was 4.7% in unit terms versus 5.6%in 9M08. EastPharma's market share in 9M09 was 3.4% in TRY valueterms, while it was 3.9% in 9M08.The therapeutic breakdown of the total sales of EastPharma productsin 9M09 in unit terms was; Systemic Anti-infectives 28.6%,Musculo-Skeletal System 20.0%, Alimentary T. & Metabolism 13.66%,Cardiovascular System 11.8%, Respiratory 5.5%, Dermatology 5.9%,Nervous System 5.5%, G.U. System & Sex Hormones 4.9%, Antineoplast +Immunomodul 0.2%.Comments on the financial performance and business developments forEastPharma in 9M 2009:Revenues reached USD187.3m in 9M09, showing a 16% increase whencompared to the same period in 2008. The contribution of Rocheproducts amounted to USD55.0m in 9M09. In 9M09, Deva human pharma netsales (excluding Roche products) increased by 28% in TRY terms andSABA net sales increased by 64% in TRY terms when compared to thesame 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's revenues due to theincrease in the average TRY/USD foreign exchange rate by 29% on ayear over year basis.* Margins improved with increased sales in 9M09, Margins were negatively affected in 9M08 not only due to the weak sales, but also because of supply-chain inefficiencies due to necessary factory movements.* The gross profit margin (IFRS) reached 47% in 9M09, whereas it was 32% in 9M08. Product acquisition from Roche and the new product launches had positive effects on the gross profit margin. Gross profit was USD88.1m which corresponds to an increase of 46% on a year over year basis.* EBITDA reached USD39.8m in 9M09, while adjusted EBITDA (which excludes certain items in other gains and losses and general administrative expenses) was USD43.8m, which corresponds to an adjusted EBITDA margin of 23% versus a negative result at the end of the year 2008 and only USD7.8m in 9M08.Another improvement can be seen in the expense accounts.* Operating expenses decreased by 23% on a year over year basis to USD64.6m from USD84.1m, which shows an improvement from 52% to 34% in percentage terms of the total operating expenses to the net sales.* Marketing and sales expenses as a percentage of the total operating expenses have decreased to 60% in 9M09, which was 69% in 9M08.* The finance cost was USD18.8m in 9M09, which shows a decrease of 37% on a year over year basis.There is an improvement in reducing receivables turnover dayscompared to year-end 2008. Receivables turnover days in 9M09decreased to approximately 122 days whereas it was around 201 days atthe end of the year 2008. The inventory turnover days increased to188 days compared to the 170 days at the end of the year 2008.Reconciliation of Adjusted EBITDAEastPharma uses Adjusted EBITDA to manage its operations asmanagement believes it is the best indication of underlyingperformance..Adjusted EBITDA is calculated as follows:USDNet profit 10,538,151Finance costs, investment revenue, income taxes,depreciation and amortization 29,305,995Provisions (tax provisions * and restructuring of personnel andothers) 3,361,004Fair value of call option liability 477,993Foreign exchange loss 168,104Adjusted EBITDA 43,851,247*In 9M09, Deva Holding received a tax penalty from tax authorities asa result of a general inspection in the pharma market in Turkey. Thetotal amount of USD4.0m has been reserved as provision for this taxpenalty on our accounts. The fine has been appealed and the legalprocedures are being followed by Deva Holding.Major developments after the balance sheet date:1) Update on Price Regulation in the Turkish Pharma Market:The Ministry of Health has announced a reduction on the government'sdrug expenses which will become effective by 4th December 2009. Basedon the new regulation:* There will be an additional 13% government discount for originalpharmaceutical products with no equivalents,* The prices of original pharmaceutical products which haveequivalents will in the future be 60% of the reference price(previously 100%),* The prices of generic pharmaceutical products will be 60% of thereference price (previously 80%).* For products in the "20 years" category (i.e., those products thathave been produced in Turkey for twenty years or more and haveequivalents, and have an ex-factory price greater than TRY 6.79), areference price will be determined until April 2010. The prices ofthese products in the Turkish market will be 60% of the referenceprice. For these products, there will be additional 13% governmentdiscount until the reference price is set.Products that have beenproduced in Turkey for twenty years or more, with an ex-factory pricelower than TRY 6.79 will not be affected by this regulation.* No products which have an ex-factory price lower than TRY 3.56 willbe affected by this regulation.2) Long Term LoanA loan of USD14.0m was received in October 2009 by the Group with amaturity of 48 months. Repayments of interest and principal will bemade on a quarterly basis, it carries an interest rate of 7% perannum and is secured by one of the Group's buildings mortgaged at anamount of TRY28.5m.3) Flood damageDeva Holding's Headquarters endured limited flooding due to the heavyrain in Istanbul on September 9th, 2009. According to authorities,this was the heaviest rain recorded in Istanbul in 80 years. . Thebasement of the building was damaged, but, all important systems(e.g., I.T., archives, etc.) were significantly above the waterlineand were not affected.All company operations including production, sales and administrationhave continued without interruption during the flood. The productionfacilities in Kosekoy and Cerkezkoy continued to operate withoutinterruption.The company was fully insured fort he damage sustained in the floodsand USD3.4m has been collected in cash in September and the rest isbeing collected after the balance sheet date.4) Successful implemantation of SAP project in OctoberIn line with its decision to renew its ERP system and thus invest inits information technologies infrastructure, Deva Holding has putinto effect the SAP project in October 2009. Under the project, thedecision making process and support systems created for the businessprocesses were re-configured which contributed to efficiency andproductivity being increased by the new system's operational andmanagerial reports. Another contribution of the project is thecreation of the institutional memory and it has set higher standardsfor doing business.---END OF MESSAGE---http://hugin.info/138031/R/1355058/328757.pdfThis announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
Datum: 13.11.2009 - 19:14 Uhr
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