Leading Bulgarian generic pharma producer Sopharma (3JR BU) books 62.3% y/y rise in net income, sales add 2.47% y/y as Ukraine stabilized. The company published individual Q1 2016 financial statements. It positively surprised with considerable profitability improvement on stable sales and cost optimization. Q1 2016 net income is up 62.3% y/y to BGN 11.7m, above our expectations, as external service costs decreased 36% y/y due to lower consulting, advertising and external substance manufacturing expenditures. Accordingly, EBITDA is up 40.5% y/y to BGN 16.5 m, highest in 11 quarters.

Sopharma on the Bulgarian Stock Exchange

First sales rise in Ukraine

The top line stabilized with revenues up 2.47% y/y to BGN 41.5m due to 8% rise in domestic sales, 1% rise in sales in European markets and 16% drop in other markets. The company reports first rise in sales to Ukraine since the start of the Ukraine/Russia conflict in 2014 arguing a relative stabilization of the political and economic situation in Ukraine. No country by country details available, though.

Dividend is back

Additionally, at the end of April 2016, Sopharma’s management proposed to reinstate dividend distribution with a BGN 0.07 DPS of 2015 profits. The proposal yields 2.6% at current market quotes and is in line with the 5 year average dividend yield for the company. It would be put on vote at the regular annual shareholders meeting on June 17th, 2016.

About Sopharma

Sopharma is one of the biggest Bulgarian groups of companies. It is a leading producer, exporter and distributor of pharmaceutical products with a strong presence in Eastern and South-Eastern Europe, offering a wide range of prescription medicines and OTC products. The Group is vertically integrated and includes both production and distribution. It operates 15 pharmaceutical factories in Bulgaria, all in compliance with GMP (Good Manufacturing Practices), one in Ukraine, and two in Serbia. It is also the owner of the leading healthcare product distributor in Bulgaria – Sopharma Trading (SO5 BU) and the majority shareholder in a leading distributor and owner of a large pharmacy chain in the Baltics and Belarus – Briz, Latvia.

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