On JSC Grindeks financial results for nine months of 2014

On JSC Grindeks financial results for nine months of 2014


On Friday, on 28 November, the JSC Grindeks submitted the non-audited consolidated financial statements for nine months of 2014 to “Nasdaq Riga”. Non-audited financial results indicate that turnover of the Group in the nine months of 2014 was 63.1 million euros and has decreased by 17.3 million euros or 21.5% in comparison to the nine months of 2013.

While the Group’s net profit, attributable to shareholders of the parent company, was 3.7 million euros in the nine months of 2014 and has decreased by 4 million euros or 52.4% in comparison to the nine months of 2013. Gross profit margin in the nine months of 2014 was 58.3% while net profit margin was 5.8%. In the nine months of 2014 the Group’s production was exported to 57 countries worldwide, a total of 59.7 million euros which is 16.4 million euros or 21.5% less than in the nine months of 2013.

The turnover ratio of the nine months of 2014 in comparison to the same period of the last year has been influenced by a number of key factors – geopolitical situation in Russia and Ukraine, which led to the devaluation of the national currency, as well as a wholesale warehouse balance optimization. Because of these factors, the forecast that the performance in Russia will improve in the second half year has not reached the expected result, while the decrease in net profit was due to an increased investment in research and development of two strategic projects. In cooperation with scientists of Latvia the project of inhibitor of cardio protective agent – GBB hydroxyls with an original structure – chemical and preclinical pharmacological efficiency studies have concluded, 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 nine months of 2014 was 55.6 million euros and has decreased by 15.7 million euros or 22% in comparison to the nine months 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 45.2 million euros in the nine months of 2014, which is by 16 million euros or 26.2% less than in the nine months of 2013. The highest increase, compared to the nine months of 2013 is shown in Belarus +51%, Azerbaijan +36%, Armenia +31% and Turkmenistan +29%. In its turn, turnover of the final dosage forms in the Baltic States and other European countries was 10.4 million euros, which is by 0.3 million euros or 3.4% more than in the nine months of 2013. In the nine months of 2014 Grindeks has begun export of final dosage forms to several new markets – Great Britain, Finland, Slovakia, Spain, the Netherlands and Portugal. Cooperation with Tunisia that was launched last year is successfully ongoing and shows +78% increase in comparison to the nine months of the last year, and Vietnam where sales amount has increased by 12.1. The turnover in the nine months of 2014 has increased by 76% in markets outside the CIS and the Baltic States in comparison to the nine months of the last year. The highest growth in comparison to the nine months of 2013 is in Czech Republic +32%.

In the nine months of 2014, sales of active pharmaceutical ingredients reached 7.4 million euros which is by 1.7 million euros or 18.7% less than in the nine months of 2013. Main markets of Grindeks active pharmaceutical ingredients in the nine months of 2014 are the Netherlands, Germany, Canada, USA, France, Ireland and Japan. The most required active pharmaceutical ingredients of Grindeks are Zopiclone, Oxytocin, Ftorafur, Droperidol, Xylazine, Medetomodine, Detomidine and Ursodeoxycholic acid.

JSC Grindeks Chairman of the Board Juris Bundulis: “Business activities in the high risk markets is causing additional challenge to the company, however, Grindeks continues to work on product development, carries out new intentions and enters new markets. The pharmaceutical industry has its own specifics – the results cannot be achieved as quickly as we would like and we have to aim towards the long term development. As Grindeks is a long-term growth oriented company, we are working on the business risk mitigation and diversification step by step, as well as business development in new markets and in order to reduce our dependence on situation in a specific region, we sign contracts with new clients of existing markets. Positive factors that indicate a positive trend and will improve performance of Grindeks in the future are the steady demand of Grindeks products and registration of new products in different markets.”

Grindeks financial statemt of nine months of 2014 (361 KB)

About Grindeks

Grindeks is the leading pharmaceutical company in the Baltic States. Its main fields of action are: research, development, manufacturing and sale of original products, generics and active pharmaceutical ingredients. The Group of Grindeks consists of five subsidiary companies in Latvia, Estonia, Russia and Slovakia as well as representative offices in 13 countries.

Grindeks specializes in the heart and cardiovascular, CNS and anti-cancer medication therapeutic groups. A range of products covers a successful combination of original products and generics, with the original products Mildronate® and Ftorafur® and more than 100 forms of generics included therein. Currently Grindeks produces 25 active pharmaceutical ingredients.

Products of the company are exported to 59 countries and its export comprises more than 95% of the total turnover. The main markets are: Russia and other CIS countries, the Baltic States, Germany, the Netherlands, Japan and the U.S.

To increase production capacity and develop infrastructure, since 2002 the company has accomplished many significant investment projects, investing more than 70 million euros over the years.

JSC Grindeks shares are listed on the Official List of “Nasdaq Riga”. Major shareholders of JSC Grindeks are Kirovs Lipmans – 33.29%, “AB.LV Private Equity fund 2010” – 22.66%, Anna Lipmane – 11.38%, “Swedbank” AS Clients Account (nominee account) – 10.47%.

More information about the company – www.grindeks.lv/en/

Follow Grindeks: Twitter.com/AS_Grindeks ; Youtube.com/Grindeks LV

Further information:

Laila Kļaviņa
Head of the Communications Department, JSC Grindeks
Phones: (+371) 67083370, (+371) 29256012
Fax: (+371) 67083505
Email: [email protected]

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