| Krka presented January to September operating results and future plans |
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06/11/2009 17:20 (14 Day 15:17 minutes ago) | |||||
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The FINANCIAL -- The Management Board of the Krka public limited company on November 5 held a press conference to present the business results of the Krka Company and Krka Group for January to September 2009 and plans for next 5 year period, which were also discussed by the Supervisory Board at its meeting yesterday.
The Chief Executive and President of the Management Board Jože Colarič announced that the results for first nine month were good for both the Krka Group and the Krka Company. Over the period the Krka Group sold products and services worth EUR 689.9 million (nearly EUR 2 million more than on the same period of 2008), and generated a net profit of EUR 108.3 million. The Krka Company sold products worth EUR 614.7 million and generated a net profit of EUR 113.3 million over the period. The Krka Group is planning sales growth of 6% in coming year.
Sales
Sales data in local currencies, together with the figures on sales volume indicate growth in Krka Group sales of almost one tenth in comparison with the same period last year. The falling value of the local currency on a number of major Krka markets, however, has meant the increase in sales volume has not been reflected in an increase in sales value when expressed in euros.
Krka Company sales totalled EUR 614.7 million and were EUR 9.8 million or 2% higher than the figures for the first nine months of 2008.
Krka Group sales by region
It is followed by Region East Europe, where sales were worth EUR 146.2 million (an 11% fall) and constitute 21.2% of overall Group sales. This region includes Krka's largest individual market, the Russian Federation, where product sales reached EUR 110.8 million, maintaining the same level as the first three-quarters of 2008. Krka product sales on the markets of Region South-East Europe were worth EUR 95.1 million (a 4% drop), representing 13.8% of Group sales, while sales on the Slovenian market were up by 2% to EUR 79.2 million, which constituted 11.5% of total Krka Group sales.
Krka Group sales by product and service group
Self-medication product sales fell by 15% compared to the same period last year and were worth a total of EUR 57.8 million. The fall in sales has largely been due to the state of the economy on the larger markets, which are key to sales of Krka self-medication products. For similar reasons, cosmetics sales fell by 30%, and totalled EUR 5.4 million. Animal health products generated sales of EUR 18.9 million, growth of 2%. Sales of health and tourism services were worth EUR 25.9 million, exceeding sales for the first three quarters of last year by 5%.
Business results
The Krka Group's net profit margin was 15.7% (Krka Company: 18.4%), the EBIT margin was 22.5% (Krka Company: 23.2%), and the EBITDA margin 30.6% (Krka Company: 30.2%). The Krka Group's ROE was 17.6% (Krka Company: 18.1%), and the ROA was 11.1% (Krka Company: 12.0%).
Research and development
Krka successfully concluded numerous centralised procedures (CP) with the European Medicines Agency (EMEA), which provide market authorisation for all 27 EU states. The most important achievements were acquiring market authorisations for a pharmaceutical with the API clopidogrel hydrogen sulphate (Zyllt), and one based on clopidogrel hydrochloride as an alternate salt. Clopidogrel is one of the most important anti-coagulant pharmaceuticals, which reduces clotting and hence the occurrence of strokes and heart attacks. It is one of the best-selling pharmaceuticals in the world.
An EMEA CP was also used to acquire market authorisation in the EU for Nimvastid®, which contains the API rivastigmine and it is used for the treatment of Alzheimer's disease. It was registered in two pharmaceutical forms: capsules and orodispersible tablets (ODT). The latter is a unique form for the pharmaceutical, with Krka the only company to have developed this ING redient as an ODT.
Market authorisations were acquired via an EMEA CP for repaglinide tablets in three strengths. Repaglinide is a pharmaceutical that treats diabetes patients by balancing blood sugar levels. The same procedure were used to acquire a market authorisation for Vizarsin, which is a generic version of tablets with the API sildenafil, which has an effect on erectile dysfunction and is intended to treat impotence.
A number of European decentralised procedures (DCP), mutual recognition procedures (MCP) and national market authorisation procedures were also carried out. Their successful conclusion added new products to Krka's product range of prescription pharmaceuticals on a number of different markets.
New products were also added to the range of self-medication and food supplement products under the brand Pikovit®, Duovit®, Bilobil® and Herbion®. The animal health product range was expanded with products containing enrofloxacin, colistin sulphate and florfenicol on the markets of the EU and eastern Europe. In the cosmetics field, 6 products were developed in the Sun Mix line, while the registration of Fitoval® Plus shampoo enriched the self-medication product range in Ukraine .
Investments
The investment in the Bršljin plant, where construction is now underway on a modern new syrup production plant, will expand production capacity and optimise material flow. Last year a separate biocide production facility was constructed. The preparation and equipping of facilities for a pellet coating and/or granulate production line ensured an increase in production capacity and the conditions required for the timely launch of capsules to new markets.
The purchase and installation of an additional line has eliminated a bottle neck at the injection production plant, and increased ampoule filling, checking and packaging capacity; the planning of new products in spray form led to renovation works starting in September of production facilities to ensure the required cleanliness and explosion-proofing standards.
Preparatory works began in September for construction of the new development and control centre. The 13,000 m2 facility will meet the needs of various users within the Krka system.
Preparations are in the final phase for a strategically important investment project to build additional production capacity in the Russian Federation. Plans are underway to acquire the building permit and other consents. According to Krka's plans, the building permit should be acquired in May 2010.
Terme Krka is planning to reconstruct the swimming pool and roofs, and to increase hotel capacity at Strunjan. An application for approval for funds from the European Regional Development Fund has been submitted for a planned investment of EUR 8.0 million. The response is expected in November.
Employees
At present, slightly over 47% of Krka Group employees are now employed in companies and representative offices abroad, and a bit more than 51% of employees hold at least university level qualifications.
At the end of September 447 staff members were studying part-time, 94 of whom on postgraduate courses. In 2009, 54 staff concluded their studies. At present there are 98 young people on Krka scholarships, largely in the fields of pharmacy and chemistry.
Investor information
In the first nine months of 2009, the Krka share price rallied significantly, increasing by over 49% over the period. The Slovenian Stock Exchange Index (SBI 20) increased 18% over the same period. The Krka share price at 30 September was EUR 72.03, while in June the Krka share price reached its highest value of the year, EUR 75.25.
The average daily turnover in Krka shares in the first nine months of 2009 was EUR 846 thousand. The market capitalisation of Krka as at 30 September 2009 was a bit less than EUR 2.6 billion.
Assessment of the Krka Group's realisation of its 2009 business objectives
The Krka Group's plans for 2010
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