05 Jun Lavipharm – Financial Results FY 2010
2010 was undoubtedly one of the most demanding years, with great challenges facing every segment of the national economy. The turmoil created in the Greek pharmaceutical market since the beginning of the year has seriously affected the turnover of pharmaceutical companies. The price changes, which were announced by the government at the beginning of 2010 and took effect in June and September, led to a decrease in inventory levels throughout the supply chain and, consequently, to a significant drop in sales, negatively influencing gross margins.
In this environment, the consolidated turnover of Lavipharm reached 198.4 million Euros compared to 249.8 million Euros for the corresponding period in 2009. Due to the fall of pharmaceuticals’ prices, Gross profit dropped to 31.7 million Euros from 39.5 million Euros in 2009. In Lavipharm, the management’s priority during 2010 was to maintain liquidity and reduce costs. In that context, a double digit decrease in operating expenses was achieved (11.7%), mainly due to the further reduction of administrative expenses. An extraordinary income of 8.0 million Euros is included in Other Operating Income, resulting from an agreement with the Italian company Chiesi regarding the nitroglycerine transdermal system for the Italian market. As a result, consolidated EBITDA increased by 162.1% and reached 9.7 million Euros from 3.7 million Euros in 2009. It is noted that in Italy, which is the most significant market for the specific product, Lavipharm maintains supply and distribution agreements with two other companies in the industry that distribute the product under Lavipharm owned trademarks. The financial results for 2010 include non-repetitive gains of 3.9 million Euros resulting from a debt restructuring and partial forgiveness in the Group’s subsidiary in the USA.
Respectively, a profit of 13.1 million Euros resulting from debt rescheduling of the same subsidiary was included in the previous year’s results. Consequently, the figures are not comparable with FY 2010 consolidated results, which amounted to profits before taxes of 0.9 million Euros compared to profits before taxes of 3.9 million Euros last year and losses after taxes and minority interests of 3.7 million Euros compared to profits of 0.06 million Euros in 2009. It is worth mentioning that, despite the market liquidity crisis, the company restrained its loan obligations at the same level as in 31/12/2009, while it reduced its short term liabilities by 17.6%.
Regarding the financial results of the parent company Lavipharm SA, turnover amounted to 46.9 million Euros from 56.5 million Euros in the previous year, while Other Operating Income and EBITDA increased by 7.4 million Euros and 4.3 million respectively, for the same abovementioned reasons. Results before taxes show profits of 3.1 million Euros compared to losses of 2.1 million Euros last year, while results after taxes amounted to profits of 1.2 million Euros compared to losses of 2.3 million Euros in 2009.
With the company’s growth and development as a primary objective and given the current international economic and business constraints, Lavipharm carefully and diligently proceeds with all the necessary actions required to further enhance its commercial presence in Greece, while focusing on its establishment as a key player in the global pharmaceutical market.