EASTPHARMA LTD.
London, 10 March 2017 - EastPharma (EAST LI) announces it will be releasing its audited financial statements for the year ended 31 December 2016 and a review of its main subsidiary DEVA Holding's audited financial statements for the related period.
Management comment on the financial performance of EastPharma is provided in the attachment, and a presentation of the results will be available on the EastPharma website www.eastpharma.com on 13 March 2017.
A conference call to review the financial performance for the year ended 31 December 2016 will be hosted by the management of EastPharma at 12:00-noon London time on 13 March 2017 (08:00am New York time / 01:00-pm Zurich time / 03:00pm Istanbul time). The dial-in details are provided below.
Conference call:
Dial-in Number (UK): + 44 (0)20 7162 0077 Dial-in Number (US): + 1 646 851 2407 Dial-in Number (Switzerland): + 41 (0)434 5692 61 Dial-in Number (Germany): + 49 (0)695 8999 0507
Conference ID: 961504
For further information, please contact: Investor Relations: email: ir@eastpharma.com
MANAGEMENT COMMENTS ON EASTPHARMA's FINANCIAL PERFORMANCE IN 12M 2016 (IFRS):
According to IFRS results, revenue in 12M 2016 was USD 224.9mn, up 7.2% from the same period in 2015 (USD 209.9mn). In Turkish Lira terms, revenue increased by 19.1% in the same period (Net sales in 12M 2016 were TRY 676.0mn vs TRY 567.5mn net sales in 12M 2015).
The average US Dollar exchange rate strengthened by 11.0% against the Turkish Lira to 3.0181 in 12M 2016, which compares with an average rate of 2.7191 in 12M 2015. The USD/TRY exchange rate was 3.5192 on 31 December 2016, while it was 2.9076 on 31 December 2015, which corresponds to an increase of 21.0%.
EastPharma's sales increase was mainly achieved by both increased volumes at human pharma businesses and the price increase which was effective as of 22 February 2016. In 12M 2016 versus 12M 2015, Human Pharma revenues in US dollar terms increased by 7.1% (from USD 195.3mn to USD 209.2mn). Veterinary products revenues increased by 8.6% (from USD 11.77mn to USD 12.78mn)
Deva's Capital Markets Board (CMB) results show revenue in 12M 2016 was TRY 688.5mn, up 19.4% from the same period in 2015 (TRY 576.4mn). In 12M 2016 versus 12M 2015, Human Pharma revenue increased by 19.5% (from TRY 536.8mn to TRY 641.3mn). Veterinary business revenue increased by 20.4% compared to the 12M 2015 (from TRY 31.89mn to TRY 38.41mn).
EastPharma's gross profit in 12M 2016 was USD 102.0mn, up from USD 92.4mn in 12M 2015. The gross profit margin in 12M 2016 was 45% vs 44% in 12M 2015.
EBITDA in 12M 2016 was USD 55.8mn vs USD 46.5mn in 12M 2015 representing an EBITDA margin of 24.8% vs 22.1% in 12M 2015.
Operating expenses in 12M 2016 increased by 1.1%, from USD 62.5mn to USD 63.2mn. The ratio of operating expenses to revenues decreased to 28.1% from 29.8% compared to 12M 2015. Sales and marketing expenses in 12M 2016 were 14.3% of revenues; general administrative expenses were 12.0% of revenues; research and development expenses were 1.8% of revenues. These expenses were 15.9%, 11.6% and 2.3% in 12M 2015, respectively.
Finance cost decreased by USD 1.57mn in 12M 2016 compared to the same period of 2015; from USD 35.27mn to USD 33.70mn. Foreign exchange gain/losses on borrowings decreased by USD 0.4mn, amortization of discount on receivables decreased by USD 1.15mn, other finance expenses decreased by USD 0.25mn and on the other hand interest on borrowings and bond interests and expenses increased by USD 0.23mn. Average TRY interest rate increased to 11.9% in 12M 2016 from 11.3% in 12M 2015.
Receivable days at 31 December 2016 were 109 days, compared to 120 days as at 31 December 2015.
Philipp Haas, EastPharma's Chairman and CEO, stated;
'The headwinds in the market, which started in mid 2016, continued throughout the second half of the year, the most important ones being restrictions on reimbursement of high volume products, increased competition in the domestic market and a deterioration of the value of the Turkish Lira. Despite these margin pressures, we were still able to hold and even slightly increase our gross profit margin by executing further cost saving programs, introducing new products as well as through a strong increase of sales in volume terms.
While the weak Turkish Lira was very detrimental for our gross profit margin, there was one positive effect, which was a marked decrease of our debt in US Dollar term by 26.6%, enabled by our strategy to keep all our debt in Turkish Lira terms.
For 2017, we estimate that the same headwinds will continue, however, our company is well positioned to confront the upcoming challenges, especially through the introduction of new products, which is a result of many years of heavy investments in R&D and which will further strengthen us in the key areas of our activities.'
EastPharma Ltd - a company active in the manufacturing and marketing of pharmaceutical products in Turkey and in other regional markets; for further information please visit www.eastpharma.com
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