Sopharma

Leading generic pharma company Sopharma expanded H1 2018 consolidated top line 21.5% y/y, bottom line down 25.1% on higher costs due to largescale expansion, according to Company’s latest interim financials.

Revenues added 21.5% y/y to BGN 574.4m, with local sales advancing by 10% y/y, while European sales marked a 56% y/y boost.

The latter results mainly from the Group acquiring local pharmacy chain Pharmastore and Serbian pharma wholesaler Lekovit in 2017. With both local and foreign expansion at play, Sopharma’s OPEX increased substantially, adding 25% y/y to BGN 547.3m. As a result, the Company’s EBITDA erased 10.7% y/y dropping to BGN 43.6m. Further down the line, EBIT decreased by 19.6% y/y to BGN 27.1m on 45.7% y/y higher net financial loss in H1’18. The latter was due to financial income from investment operations decreasing faster compared to interest expenses on debt facilities.

Overall, net income decreased by 25.1% y/y to BGN 22.5m in H1 2018. As at the end of H1’18, interest-bearing debt was up by 5.6% y/y to BGN 296.2m as short-term debt added 8.9% y/y. The latter could be attributed to pharma wholesale subsidiary Sopharma Trading need for working capital for its large scale expansion in Bulgaria and abroad.

Export boosted revenues in July

Sopharma expanded top line by 10% in July 2018 on higher export, the Company announced in mid-August in the in a regular newsletter to the Bulgarian Stock Exchange.

During the month, Sopharma marked a 14% y/y boost in revenues generated from export and 3% y/y increase in local sales. For the period Jan-Jul’18, the Company registered 6% y/y drop in revenues resulting from a 5% y/y decrease in local sales and 6% y/y decline in exports.

Introduction of interim dividend expected

Sopharma also proposed to distribute interim DPS of BGN 0.05 to be voted at an extraordinary shareholders meeting on 14th Sep’18, it became clear as the Company published an invitation that still pends approval by the Trade Registry.

The announced interim dividend corresponds to a 25% payout ratio and yields 1.25% at current quotes.

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