Adcock Ingram posts 39 million rand headline loss - CNBC Africa

Adcock Ingram posts 39 million rand headline loss

Earnings

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Adcock Ingram's products include Myprodol, Sosensol and Mypaid Forte. PHOTO: Getty Images

Revenue increase slightly to 2.4 billion rand for the six-month period ended 31 March 2014 from 2.3 billion rand in the previous comparative period in 2013.

Turnover also saw the same marginal growth, due to a sharp slow-down in the over the counter and prescription generics portfolios in Southern Africa.

[DATA AIP:Adcock Ingram] is a South African manufacturer, marketer and distributor of various healthcare products. The group also has a share of the private pharmaceutical market with a strong presence in over the counter brands.

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Total group turnover, which included the turnover of Datlabs in Zimbabwe and Cosme in India for the period under review, increased by 3.4 per cent to R2.4 billion rand from 2.3 billion rand in 2013.

Gross profit took a dip by 13.9 per cent to 845.9 million rand for the period under review from 982.7 million rand, and trading profit took the same dive and fell to 115.6 million rand from 397.3 million rand in 2013.

“The poor operational performance for the reporting period under review is regrettable and unfortunate,” Adcock Ingram said in a statement.

“There are a number of sector specific reasons for the group's under-performance, not least, the generally negative market conditions during the period under review, [and] margin pressures through an under recovery of increasing input and overhead costs.”

A headline loss of 39 million rand was recorded for the period under review from 2013 headline earnings of 317 million rand. This translates into a loss per share of 24.8 cents from 188 cents in 2013.

Adcock also recorded an 18.8 million rand loss before taxation from 450.3 million rand profit in the previous year.

Turnover for the group’s Southern Africa segment dipped to 2.1 billion rand from 2.2 billion rand in 2013, with the region posted a sales decrease of 1.7 per cent.

Over The Counter turnover also reduced by 19 per cent to 734 million rand from 906 million rand in 2013, due to a decline in the independent wholesale channel, strong competition and through consumers continuing to buy down due to economic pressure.

Turnover in the Prescription business however increased by 13.8 per cent to 975 million rand from 857 million rand in the previous comparative period, impacted by the introduction of new products and success in being awarded certain ARV and other oral dosage tenders.

Hospital turnover also saw an increase by 3.5 per cent over the comparable period to 482 million rand from 465 million rand in 2013. Revenue in the Rest of Africa, with the inclusion of Datlabs in Zimbabwe, increased 68 per cent over the comparative period.

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“While the road ahead is likely to be challenging, the Board remains optimistic that management will respond to the task of successfully building on the proud history of the Company over the short to medium term,” Adcock explained.

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