Litha Healthcare profits fall

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Diversified healthcare business Litha Healthcare Group (LHG) on Tuesday reported a decline in diluted headline earnings per share from 9.6 cents to 0.5 cents for the third quarter ended September.

Earnings per share from continuing operations were 0.5 cents per share for the three months ended 30 September 2012 and 43.5 cents for the nine months ended 30 September 2012. Headline earnings per share from continuing operations‚ which excludes a once-off profit on deconsolidation and other unusual items‚ were 0.6 cents per share for Q3 and 11.4 cents per share for the nine months ended 30 September 2012.

Operating profit was R12.5 million for the three months ended 30 September 2012 and R253.6 million for the nine months ended 30 September 2012. The impact of the profit on deconsolidation of Biovac was a positive R171.5 million. The deconsolidation required a fair value adjustment to recognise the investment in Biovac as a joint venture from 30 June 2012 which resulted in the profit on deconsolidation.

The group believes the operating profit for Q3 was negatively impacted by a number of factors including a weakening Rand during the period‚ the effect of transport strikes which affected the Litha Medical and Litha Pharma divisions and reduced revenues in the Forensics business unit within Litha Medical.

Another factor that negatively impacted the bottom line were increases in provisions in Litha Biotech and Litha Pharma amounting to R8.7 million‚ partly as a result of aligning policies on provisions with Paladin. This is therefore a once-off impact

Once-off transaction costs relating to Pharmaplan‚ as well as merger costs relating to the merging and integration of recently acquired pharmaceutical businesses amounting to R4.5 million also impacted on earnings.

Revenue for the three months ended 30 September 2012 was R240.6 million and R1.191 billion for the nine months ended 30 September 2012. This included Biovac's turnover for the first six months.

Litha is a diversified healthcare business providing services‚ products and solutions to public and private hospitals‚ retail pharmacy/fast-moving consumer goods (FMCG) markets and government healthcare programmes in Southern Africa. It has three divisions Litha Biotech (biotechnology/vaccines)‚ Litha Medical (medical devices and consumables) and Litha Pharma (pharmaceuticals and complementary medicines).

Revenue for the three months ended 30 September 2012 was R240.6 million and R1.191 billion for the nine months ended 30 September 2012. This included Biovac's turnover for the first six months. - I-Net Bridge


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