Sopharma Trading

Pharma wholesaler Sopharma Trading’s (SO5 BU) consolidated revenues accelerated 6.6% y/y to BGN 465.6m, net profit margin shrank on increased costs in H1’19, according to latest consolidated financials published by the Company.

Growth in revenues generated mostly by logistics services

In H1’19, Sopharma Trading reported increased sales in all operating segments, the highest growth generated in medical equipment and storage and logistics services segments, the former tripling y/y to BGN 8.9m and the latter increasing 13.4% y/y to BGN 78.3m. Major retail segment grew slightly adding 2.1% y/y to BGN 282.6m, while hospital segment added 8.5% y/y to BGN 88.5m.

Costs outpace sales

Due to the Group’s rapid expansion since 2017, most operating costs’ growth continued to outpace the growth in sales. OPEX surged 11.6% y/y to BGN 41.3m, mainly driven by labor, depreciation and amortization costs (D&A). COGS, on the other hand grew slower than sales adding 6.2% y/y to BGN 418.7m. As a result, EBIT grew by 4.3% y/y to BGN 5.6m. Higher interest costs further pressed down profitability as Sopharma Trading increased its operating debt exposition in relation with its market expansion. Accordingly, net income for the interim period came to BGN 4.1m, up 4.6% y/y, entailing a net profit margin of 0.88% vs 0.91% in H1’18.