• In 2019, Group’s sales reached 137 253 thousand EUR, which is an increase by 10% or 12 997 thousand EUR.
  • Group’s EBITDA was 37 192 thousand EUR, which is by 84% higher.
  • Group’s profit reached 27 443 thousand EUR, which is the largest profit amount in history.
  • In 2020, Group forecasts revenues of 135 500 thousand EUR and net profit of 14 200 thousand EUR.

“The year 2019 is the financial best year for Olainfarm Group as well as in sales revenue as net profit. These great results are a good platform to continue to grow and with our products bring value for more and more patients. With the establishment of our new subsidiary in Russia we plan to strengthen our positions in our key markets. We are also well on our way to becoming in the top 10 of pharmaceutical manufacturers in Central Eastern Europe,” said Jeroen Weites, Chairman of the Management Board of JSC Olainfarm.

Group’s sales during the 4th quarter of 2019 were 38 479 thousand EUR and that is by 11% more than in the last quarter of 2018 when sales were 34 751 thousand EUR. In the 4th quarter 2019 EBITDA was 10 935 thousand EUR that surpassed the figure of the last quarter of 2018 by 5 036 thousand EUR or 85%. Profit for the last quarter of 2019 was 8 245 thousand EUR, which is an increase by 152% in comparison with the same period 2018.

During the full year of 2019 Group’s sales reached 137 253 thousand EUR, which is an increase by 10% or 12 997 thousand EUR compared to 2018. Group’s EBITDA figure in 2019 was 37 192 thousand EUR, which is by 84% or 16 964 thousand EUR more than the results of 2018. Group’s net profit in 2019 was 27 443 thousand EUR, which is the largest net profit amount in history of the Group. Profit increased by 156% or 16 712 thousand EUR in comparison with 2018.

The reporting period profit was favorably affected by the increase in gross profit by 9 973 thousand EUR, which is related to the major final dosage forms manufacturing in larger quantities, decrease in selling expense by 7 132 thousand EUR due to review of relations with marketing partners and income from foreign exchange fluctuations (2 187 thousand EUR) against losses of 2 368 thousand EUR from foreign exchange fluctuations in 2018. Additional net profit of approximately 4 750 thousand EUR was generated due to extraordinary sales to Russia. The net profit was negatively affected by increase in administrative expenses and impairments.

Group’s successful operations allowed to accumulate 15 225 thousand EUR at the end of 2019 and that will be one of the main sources of financing for fixed assets purchases and investments as well as investments into research and development activities linked for accomplishing clinical trials.

According to the approved Dividend policy the Management Board for 2019 will recommend dividend payout of 20% of Parent audited net profit.

Group’s Debt service coverage ratio (DSCR) during 2019 increased from 2.1 to 3.1. Net Debt-to-EBITDA ratio has been improving for the third year in a row and was 0.2 at the end of 2019.

The Group’s main business segment is final dosage forms that are manufactured by Parent in Olaine. In 2019 pharmaceutical products worth 80 991 thousand EUR were sold, which is an increase by 14% or 10 044 thousand EUR if compared to 2018.

Parent’s sales to various countries and regions during 2019 had mostly positive trend. If compared to 2018 results, sales to Russia increased by 23%, Latvia by 5%, Belarus by 10%, the Central Asian region by 13%, the EU countries by 12%, sales to Other countries by 10%. Decline in sales was in Ukraine and the Caucasian region by 4% and 3%, respectively.

Throughout 2019 sales of JSC Olainfarm main final dosage forms continued to increase. A share of the best sold product Noofen increased to 20% that is by one percentage point more than a year before. The share of the three largest products: Noofen, Neiromidin and Furamag/Furasol comprised 56% that is also by one percentage point higher than a year before. At the same time in the 4th quarter this year the bestselling product was Noofen with 22% share, followed by Neiromidin with 21% and Furamag/Furasol group with 17%.

Pharmacies segment in 2019 generated revenue increase by 7% compared to 2018 and reached 25 417 thousand EUR. During the 4th quarter 2019 sales of pharmacies were 6 776 thousand EUR, which is 6% increase in comparison with the same period in 2018.

Revenues of Compression materials segment in 2019 were 8 793 thousand EUR that is 8% or 713 thousand EUR less than a year before. Sales of compression goods during the last quarter of 2019 were 2 349 thousand EUR, which is a drop by 13% against the fourth quarter of the previous year.

Revenues of Wholesale segment from external customers were 5 382 thousand EUR, which is a decline by 2% or 104 thousand EUR. Wholesale revenues in the 4th quarter 2019 were 11% more than during the same period 2018 and reached 1 485 thousand EUR.

The Chemical segment’s income in 2019 was 16% higher than in 2018 and reached 5 124 thousand EUR. Revenues from chemical products in the 4th quarter of 2019 were 1 097 thousand EUR, which is a decline by 20% if compared to the last quarter of 2018.

Other segment combines Silvanols, Diamed and Olainmed medical facilities, Belarussian manufacturing company Biotest and other, and this segment generated 11 546 thousand EUR in revenues in 2019, which is 15% more than in 2018. During the last quarter of 2019 sales increased by 4% and were 3 128 thousand EUR.

According to the previous plan a set of pre-clinical and clinical trials was conducted in 2019. Throughout 2019 five 1st phase clinical trials (pharmakinetics and bioavailability) were started with completion of trial planning, drafting required documentation and issue of permits. Trials are set to close and final reports to be received in the 1st to 3rd quarters, 2020.

At the same time in 2019 planning and preparation phase for 3rd phase clinical trials for two final dosage forms took place, with a plan to start the trials in 2020. Implementation of clinical trials for peripheral nervous system diseases is planned for the 1st quarter, 2020.

During 2020 substantial investments are intended  for planning of clinical trials in order to start one 1st phase clinical trial and three 3rd phase clinical trials in the period of 4th quarter 2020 – 1st quarter 2021.

For 2020, Group estimates revenues to be 135.5 million EUR and net profit of 14.3 million EUR as well as EPS of 1 EUR. JSC Olainfarm forecast revenues in amount of 97.3 million EUR and net profit of 13.4 million EUR.

During this year the Group’s capital expenditures are planned in amount of 19.5 million EUR, incl. 9.4 million EUR in product development. Strong cash position and high forecasted operating cash flows allow the Group to finance investments and to continue repayment of borrowings.

At the same time Group estimates that in the 1st quarter 2020 revenues and net profit will be lower than the results in 2019, however, accelerated in-market performance in the following quarters will allow to reach annual forecasts.

Condensed Consolidated Statement of  Financial Position

  EUR '000EUR '000
Intangible assets38 68836 619
Property, plant and equipment42 46343 697
Right-of-use assets7 069-
Investment properties3 4283 492
Other non-current assets 801 983
Inventories28 65525 794
Receivables36 03134 637
Cash15 2252 689
 TOTAL CURRENT ASSETS79 911   63 120
TOTAL ASSETS172 360 147 911
Share capital19 71919 719
Share premium2 5042 504
Retained earnings109 11383 079
 TOTAL EQUITY131 324   105 078
Non-current liabilities  
Borrowings and lease liabilities12 0211 793
Deferred income3 1942 878
 Total Non-Current Liabilities15 215   4 671
Current liabilities  
Borrowings and lease liabilities9 73223 236
Trade payables and other liabilities15 59414 540
Deferred income 495 386
 Total Current Liabilities25 821   38 162
 TOTAL LIABILITIES41 036   42 833

Consolidated statement of comprehensive income

 Q4 2019Q4 2018M12 2019M12 2018
 EUR '000EUR '000EUR '000EUR '000
Revenue 38 479 34 751 137 253 124 256
Cost of goods sold(13 975)(13 596)(52 424)(49 400)
Gross Profit  24 504  21 155  84 829  74 856
Selling expense(7 803)(10 576)(30 159)(37 291)
Administrative expense(6 203)(7 312)(26 670)(24 427)
Other operating income740612 2 317 2 559
Other operating expense(2 812)734(4 074)(1 726)
Share of profit of an associate62398106
Financial income16719 2 26076
Financial expense (223) (994) (926)(2 788)
Profit Before Tax 8 376 3 661 27 675 11 365
Corporate income tax (179) (380) (279) (630)
Deferred corporate income tax48 (4)47 (4)
PROFIT FOR THE REPORTING PERIOD 8 245  3 277  27 443  10 731
Other comprehensive income for the reporting period (59) (67)212 (150)
Total comprehensive income for the reporting period 8 186  3 210  27 655  10 581
Total comprehensive income attributable to:    
The equity holders of the Parent Company 8 186  3 210  27 655  10 581
Non-controlling interests- - - -
Basic and diluted earnings per share, EUR 0.59 0.23 1.95 0.76

JSC Olainfarm is one of the biggest pharmaceutical companies in Latvia with more than 45 years of experience in production of medication and chemical and pharmaceutical products. A basic principle of company's operations is to produce reliable and effective top -quality products for Latvia and the rest of the world. Products made by the Group are being exported to more than 60 countries of the world, including the Baltics, Russia, other CIS, Europe, Asia, North America and Australia.

Additional information:  
Jānis Dubrovskis
Investor Relations Advisor of JSC Olainfarm
Phone: +371 29178878
Email: janis.dubrovskis@olainfarm.com