Sopharma

The pharmaceutical company Sopharma (BSE-Sofia: SFA; Warsaw Stock Exchange: SFA) recorded a 51% y/y increase in sales in January 2022 (vs 10% y/y growth in Jan’21).

According to a company’s announcement, local sales are normalizing, while booking an impressive growth of 4.5x y/y. Please note that last year’s base was low, but sales on the Bulgarian market still increased by 20% y/y in January 2021.

However export sales in Jan‘22 decreased by 35% y/y. No reason is stated, but probably the downward trend in Eastern European sales in 2021 continued into this year.

According to recently published individual Sopharma reports, 2021 revenue decreased by 3.1% y/y due to a 12% y/y drop in exports. This is mainly due to lower sales in the main foreign markets of Russia (down 9.1% y/y) and Ukraine (down 31.4% y/y). On the positive note, EBITDA improved by 4.9% y/y to BGN 46.2m, as the cost of hired services, compensation and impairment fell in 2021. However, net profit dropped by 14.6% y/y to BGN 24.5m (EPS of BGN 0.20). This is mainly due to the loss on the disposal of Latvian subsidiary Briz and the lack of 2021 dividends from Sopharma Trading (BGN 8.6m in 2020).

Currently, the company is trading at P/E (ind) of 23.5x, and LTM (Sep’21) P/E (cons) 10x.

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