Leading generic pharma producer Sopharma met top line estimates but missed profit expectation on new impairments – the Company published its unconsolidated unaudited FY2016 financial statements.
Sopharma FY2016 meets some of the estimates
Sopharma booked best FY2016 net profit in three years both on one off and cost optimizations. Net income came at BGN 37.3m, 8% below ELANA Trading analysts’ expectations, on additional impairments of Ukrainian investments. Yet, the bottom line is up 47% y/y on profitable divestments of its Serbian investment – Ivancic and Sons. The result is also the strongest in four years.
Operating profitability and the top line are in line with expectations. Sales declined 6% y/y to BGN 163.8m on 2.6% y/y decline in domestic sales and 11.6% y/y drop in Russian sales. Cost optimization in all segments – materials, external services and labor expenses, helped sustain operating profits. EBITDA for FY2016 is flat at to BGN 39.6m.
Positive view of 2017
2017 will be positive for the company – that was stated by Sopharma management in the last month of 2016. The company said that over the last couple of months it sees stabilization signals in Russia which gives it a dose of security for 2017. Management also appeared optimistic on the positive sales trend in Ukraine as well as on the upward trend in Poland, Belarus and Latvia. CEO and major shareholder Ognyan Donev added in the statement that new drug registration including for the OTC Tuspan syrup to add to the positive trend in 2017.
2017 started with good news
2017 started with good news for Sopharma concerning the registration and further development of a popular product Tabex. The company announced buyer of the share of Sopharma AD in Extab – Achieve – is undertaking a merger with another strong player in the development and registration of innovative medicines – Oncogenex, a publicly traded company on NASDAQ.
The procedure is expected to be completed by mid-2017, subject to approval from the US FSC. Sopharma will own approximately 3.5% in the newly created company, which will aim at filing the IND for Tabex in 2017.