Today, on 29 August, the JSC Grindeks submitted the non-audited consolidated financial statements for the first half-year of 2014 to “Nasdaq OMX Riga”. Non-audited financial results indicate that turnover of the Group in the first half-year of 2014 was 40.7 million euros and has decreased by 13.9 million euros or 25.5% in comparison to the first half-year of 2013
While the Group’s net profit, attributable to shareholders of the parent company, was 2.8 million euros in the first half-year of 2014 and has decreased by 3.1 million euros or 52.5% in comparison to the first half-year of 2013. Gross profit margin in the first half-year of 2014 was 57% while net profit margin was 6.9%. In the first half-year of 2014 the Group’s production was exported to 56 countries worldwide, a total of 38.6 million euros which is 13 million euros or 25.2% less than in the first half-year of 2013.
Wholesale warehouse balance optimisation and national currency devaluation risk management turns out to being a significant tendency in the main final dosage form markets of Grindeks. These are the main reasons that affected reduction in turnover in the first half-year of 2014. While the decrease in net profit was due to an increased investment in research and development in two strategic projects. In cooperation with scientists of Latvia the project of inhibitor of cardioprotective agent – GBB hydroxyls with an original structure – chemical and preclinical pharmacological efficiency studies, which is an important step in creating a new medical product. The other project is registration of a drug Mildronate® in China, where the 3rd phase of clinical trial for this medication is now being held.
Sales volume of the final dosage forms of Grindeks in the first half-year of 2014 was 34.5 million euros and has decreased by 12.7 million euros or 26.9% in comparison to the first half-year of 2013. The main final dosage forms markets are Russia, other CIS countries, Georgia and the Baltic States. The sales amount in Russia, other CIS countries and Georgia reached 28.8 million euros in the first half-year of 2014, which is by 11.7 million euros or 28.9% less than in the first half-year of 2013. In its turn, turnover of the final dosage forms in the Baltic States and other European countries was 5.7 million euros, which is by 0.9 million euros or 13.6% less than in the first half-year of 2013. In the first half-year of 2014 Grindeks has begun export of final dosage forms to several new markets – Great Britain, Finland, Slovakia, Spain and the Netherlands. Cooperation with Tunisia that was launched last year is ongoing and shows +78% increase in comparison with the first half-year of the last year, and Vietnam which shows +178% in comparison to the first half-year of the last year. The turnover in the first half-year of 2014 has increased by 35% in markets outside the CIS and the Baltic States in comparison to the first half-year of the last year.
In the first half-year of 2014, sales of active pharmaceutical ingredients reached 6.1 million euros which is by 1.2 million euros or 16.4% less than in the first half-year of 2013. Main markets of Grindeks active pharmaceutical ingredients in the first half-year are the Netherlands, Germany, Canada, USA, France and Japan. The most required active pharmaceutical ingredients of Grindeks are Zopiclone, Oxytocin, Ftorafur, Droperidol, Xylazine and Ursodeoxycholic acid.
JSC Grindeks Chairman of the Board Juris Bundulis: “Despite the decrease of turnover and profit in the first half-year, as previously predicted, the sales figures of the first months of the second half-year show increase and the overall situation is gradually stabilising. Since the beginning of the year, structural reforms in the company are being implemented successfully, that has already contributed to the efficiency increase of marketing and sales. Also, acquisitions of new markets takes place continuously – finding and developing business in new markets, as well as signing contracts with new clients in existing markets. Thus the planned work is underway to reduce business risks and dependence on any particular region. We will continue to pay close attention to the business risk diversification.”
JSC Grindeks informs, that the extraordinary shareholders meeting to decide on the distribution of profit for the year 2013 and composition of the Audit Committee will be announced in the next week.