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Olainfarm (0J1O)

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Friday 12 July, 2019


Olainfarm Group sales in the first half of the year increased by 7%

Olainfarm Group sales in the first half of the year increased by 7%

Preliminary consolidated results for the first six months of 2019 demonstrate an increase by 7%, compared to the six-month period of 2018, reaching 66.3 million euros. Preliminary consolidated results of JSC Olainfarm for June 2019, show that the Company has made sales worth 8.6 million euros, which represents a decrease by 27% compared to June 2018 and were influenced by various on-off events. Products of Olainfarm Group during this period were sold in 52 markets, which are located in Europe, Asia, Africa, South and North America.

From the Top 10 markets the sales have been increasing in Kazakhstan (+55%), Tajikistan (+186%) and Mongolia (+113%). Egypt was amongst the largest markets in June, while also presenting the potential for developing a long-term cooperation. According to consolidated sales numbers for June, revenues were affected by seasonality and decreased in all major markets of the Group: Russia, with a 63% sales decline compared to June of last year, Ukraine with a sales drop by 39%, and Belarus with a 5% decrease. In Latvia the revenue was the same as the last year.

In the first six months of 2019, the main sales markets of Olainfarm Group contributed 78% of the total revenue– Latvia (29% share), Russia (27% share), Belarus (13% share) and Ukraine (9% share). Other major sales markets included the Netherlands, Uzbekistan, Kazakhstan, Germany, Tajikistan and Lithuania. The most rapid sales growth during this six-month period was achieved by the Netherlands, where sales grew by 620% compared to last year, and in Tajikistan where sales grew by 42%. Russia and Belarus have demonstrated 2% and 7% sales increases within six months, respectably. Amongst the largest sales outlets a decline was marked in Ukraine (-5%), Germany (-5%) and Lithuania (-33%).

"JSC Olainfarm key performance indicators are in line with the forecasted pace of development and allows us to look at our future with optimism. In the shareholders’ meeting this June, an overall profit forecast of EUR 12.7 million proposed by the Board was approved. Half way through the year we have reached 50% of the planned consolidated sales volume - EUR 66.3 million. This is a positive result as forecasted. In order to maintain the planned growth rate, we are going to review the efficiency of our sales activities and adjust accordingly to the goals set. In addition, our investment focus is shifting from equipment and buildings to investment in science and innovation. Consequently, the next steps are very clear. First of all, it is necessary to organise drug dossiers and conduct clinical trials for medications according to the market needs and trends. Secondly, we focus on increasing the efficiency and maximising the added value of the subsidiaries within the Group. And thirdly, it is necessary to evolve the direction of new chemical products, because in the pharmaceutical business developing a new product is not only expensive but also time consuming. Success in expanding this direction will be the basis of a new growth stage,” emphasises Lauris Macijevskis, Chairman of the Board of JSC Olainfarm.

June 2019, consolidated sales  Sales, thous. EURShare in total salesChanges to June 2018
Latvia2 80232%0%
Russia1 77721%-63%
Belarus1 17014%-5%
Total8 637100%-27%

6 months 2019, consolidated sales Sales, thous. EURShare in total salesChanges to 6 months 2018
Latvia19 06029%11%
Russia17 74127%2%
Belarus8 92513%7%
Ukraine5 7529%-5%
Uzbekistan1 7403%37%
Kazakhstan1 6362%7%
The Netherlands1 5502%620%
Germany1 0162%-5%
Other7 20011%3%
Total66 326100%7%

Unconsolidated sales – June and 6 months

According to preliminary unconsolidated figures, JSC Olainfarm sales reached 6.1 million euros in June, which represents a decline by 33% compared to June, 2018. The decline in Russia increased by 64%, Ukraine by 39%, Uzbekistan by 32%. Growth was observed in markets such as Tajikistan (+186%), Kazakhstan (+122%) and Mongolia (+113%). Out of the main markets sales in Latvia shrank by 8% and in Belarus by 5%.

The unconsolidated sales results for the first six months of 2019 show that JSC Olainfarm sales reached 50,4 million euros, which represents an increase by 5% compared to the first 6 months of 2018. During this reporting period, sales have increased in six out of the ten major markets of Olainfarm – Russia (+4%), Latvia (+0.2%), Belarus (+4%), Uzbekistan (+37%), the Netherlands (+623%) and in Tajikistan (+40%). Revenues declined by 5% in Ukraine and Germany, by 3% in Kazakhstan and by 37% in Lithuania.

June 2019, unconsolidated sales Sales, thous. EURShare in total salesChanges to June 2018
Russia1 55125%-64%
Latvia1 18419%-8%
Total6 137100%-33%

Six months 2019 unconsolidated sales Sales, thous. EURShare in total salesChanges to six months 2018
Russia16 04032%4%
Latvia8 58817%0.2%
Belarus7 30514%4%
Ukraine5 66711%-5%
Uzbekistan1 7403%37%
The Netherlands1 5503%623%
Germany1 0092%-5%
Other5 89912%4%
Total50 398100%5%

Results of subsidiaries – June and the first six months of 2019

The pharmacy chain SIA Latvijas Aptieka sales reached 1.9 million euros in June 2019, which represents a 1% decrease compared to June 2018. 68 pharmacies were operating during this period. SIA Silvanols sales reached 0.46 million euros in June 2019, representing a decline by 8% vs. June 2018. The combined sales of Tonus Elast and Elast Medical in June 2019 were 0.8 million euros, which is at the same level as this time last year. Olainmed and Diamed Medical Center sales reached 0.24 million euros, while the Belarus subsidiary NPK Biotest reached 0.21 million euros in sales in June.

During the first six month period of 2019, SIA Latvijas Aptieka sales amounted to 13.0 million euros, demonstrating a 6% increase in comparison to the same time period last year, sales of SIA Silvanols reached 3 million euros which is 2% less than last year. The combined sales of Tonus Elast and Elast Medical totaled up to 4.5 million euros which is approximately the same as the last year. Medical Centers Diamed and Olainmed revenues were 1.5 million euros during the first six months of this year and the Belarus company NPK Biotest sales were worth 1.5 million euros, improving the result of last year.

 June 2019 6 months 2019
Sales markets of Olainfarm3043
Sales markets of the Group3652
Number of pharmacies68 
Sales of Latvijas Aptieka, thous. EUR1 90912 968
Sales of Medical centers, thous. EUR2371 536
Sales of NPK Biotest, thous. EUR2101 481
Sales of Tonus Elast and Elast Medical, thous. EUR7994 539
Sales of Silvanols, thous. EUR4582 962

According to the JSC Olainfarm budget, unconsolidated sales are planned to reach 99 million euros in 2019, while consolidated sales are expected at 133 million euros.  According to these preliminary sales figures, in the first six months of 2019, 51% of annual target for unconsolidated sales and 50% of annual target for consolidated sales have been reached.

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.

Information prepared by:
Janis Dubrovskis
Investor Relations Advisor of JSC Olainfarm
Ph.: +371 29178878
[email protected]

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