Adcock Ingram profits fall

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Pharma REUTERS A pharmacist counts pills in a pharmacy.

Pharmaceutical group Adcock Ingram (AIP) on Tuesday reported a 9.1% decline in its diluted headline earnings per share in the year to September 2012 to 421.8 cents compared with the same period a year ago.

Revenue from continuing operations was up 2.4% to R4.644 billion but operating profit dropped 18.7% to R869 million‚ with the percentage on sales reducing from 24.0% to 18.9%.

A final dividend of 115 cents per share was declared‚ up 8% from last year.

Operating expenses increased by 11.4% to R1.225 billion. Gross margin as a percentage of sales was adversely impacted by production inflation‚ facilities undergoing upgrades‚ and by the weaker rand‚ which affected imported raw materials and finished products.

Looking ahead‚ the company said the international accreditation of recently completed manufacturing facilities remains a key focus area during the next year as the group concludes its investment in its supply chain.

“Adcock Ingram maintains its focus on the acquisition of businesses and brands in high growth emerging markets in Africa and India.”

It expects to conclude the acquisition of Cosme Farma in January 2013.

Adcock said the current economic climate remains uncertain and the impact on consumer spending is concerning.

“Margins will continue to be impacted by cost pressures‚ particularly labour‚ transport and utilities‚ and by active ingredient prices which are directly linked to currency‚” it said. - I-Net Bridge

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