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Johannesburg - Adcock Ingram [JSE:AIP] has reported a 5% decline in headline earnings per share to 188.1 cents for the six months ended March 2013 from 198.7 cents a year ago. Diluted HEPS were 5% lower at 187.9c.
The interim dividend was maintained at 86c per share.
Turnover increased 9% to R2.46bn and earnings before interest‚ tax‚ depreciation and amortisation ( Ebitda) increased 15% to R564m. Operating profit increased by 9.1% to R475m.
The company said on Tuesday that it had delivered satisfactory operating results from the activities under its control‚ reflecting continued progress with its strategic priorities. This was‚ however‚ a challenging period‚ both in markets for its products and because the rand weakened considerably.
It said the acquisition of Indian pharmaceutical sales and marketing business Cosme was concluded in late January 2013. This acquisition‚ together with recent tender awards and the conclusion of further multinational (MNC) contracts‚ supported turnover growth.
New business in the product mix accounted for 6.1% of the overall increase with Novo-Nordisk and Lundbeck products contributing R109m in the Prescription portfolio. Price increases across the business averaged 1.9% for the period.
Over-the-counter turnover growth of 3.6% includes 4.8% price inflation but lower volumes on the back of weak consumer demand resulted in muted growth. The Hospital Products division's revenue growth of 6.0% includes a 0.5% price increase‚ with good volume growth achieved in the public sector.
Gross profit decreased by 1.3% to R1.037bn with the margin declining from 46.7% to 42.2%.
Looking ahead‚ the group said the government tender business is benefiting from significantly increased volumes which are expected to drive greater efficiencies in the supply chain. The factories are gearing up to the increased demand and the business is confident of its ability to meet government requirements on a sustainable basis.
The multinational partner of choice strategy continues to deliver attractive value with the recent additions of Lundbeck and Novo-Nordisk.
Additional collaborations are being explored. Supply chain collaborations will address the challenge in extending multinational collaboration partnerships into sub-Saharan Africa.
New product launches are planned for the third quarter.
The East Africa turnaround is on course with regulatory bottlenecks in Uganda and Tanzania having been resolved. Inspection of Adcock Ingram's factories by the Ethiopian Pharmaceutical Regulatory Authorities has commenced and bodes well for entry into that growing market.
In Ghana‚ the new management team is progressing well with revamping the factory and distribution infrastructure. Adcock will continue its focus on the acquisition of businesses and brands in high growth emerging markets.
“The impact of the current economic climate on consumer spending is concerning. Margins will continue to be impacted by cost pressures and active ingredient prices which are directly linked to currency fluctuations‚ but in the second half of the financial year will be mitigated by the recent SEP increase.
“The second six months of the year will incorporate a determined focus on improving the working capital cycle within the business‚” the company concluded.
The interim dividend was maintained at 86c per share.
Turnover increased 9% to R2.46bn and earnings before interest‚ tax‚ depreciation and amortisation ( Ebitda) increased 15% to R564m. Operating profit increased by 9.1% to R475m.
The company said on Tuesday that it had delivered satisfactory operating results from the activities under its control‚ reflecting continued progress with its strategic priorities. This was‚ however‚ a challenging period‚ both in markets for its products and because the rand weakened considerably.
It said the acquisition of Indian pharmaceutical sales and marketing business Cosme was concluded in late January 2013. This acquisition‚ together with recent tender awards and the conclusion of further multinational (MNC) contracts‚ supported turnover growth.
New business in the product mix accounted for 6.1% of the overall increase with Novo-Nordisk and Lundbeck products contributing R109m in the Prescription portfolio. Price increases across the business averaged 1.9% for the period.
Over-the-counter turnover growth of 3.6% includes 4.8% price inflation but lower volumes on the back of weak consumer demand resulted in muted growth. The Hospital Products division's revenue growth of 6.0% includes a 0.5% price increase‚ with good volume growth achieved in the public sector.
Gross profit decreased by 1.3% to R1.037bn with the margin declining from 46.7% to 42.2%.
Looking ahead‚ the group said the government tender business is benefiting from significantly increased volumes which are expected to drive greater efficiencies in the supply chain. The factories are gearing up to the increased demand and the business is confident of its ability to meet government requirements on a sustainable basis.
The multinational partner of choice strategy continues to deliver attractive value with the recent additions of Lundbeck and Novo-Nordisk.
Additional collaborations are being explored. Supply chain collaborations will address the challenge in extending multinational collaboration partnerships into sub-Saharan Africa.
New product launches are planned for the third quarter.
The East Africa turnaround is on course with regulatory bottlenecks in Uganda and Tanzania having been resolved. Inspection of Adcock Ingram's factories by the Ethiopian Pharmaceutical Regulatory Authorities has commenced and bodes well for entry into that growing market.
In Ghana‚ the new management team is progressing well with revamping the factory and distribution infrastructure. Adcock will continue its focus on the acquisition of businesses and brands in high growth emerging markets.
“The impact of the current economic climate on consumer spending is concerning. Margins will continue to be impacted by cost pressures and active ingredient prices which are directly linked to currency fluctuations‚ but in the second half of the financial year will be mitigated by the recent SEP increase.
“The second six months of the year will incorporate a determined focus on improving the working capital cycle within the business‚” the company concluded.
