JOHANNESBURG - South African pharmaceutical conglomerate Adcock Ingram said on Wednesday its turnover rose four percent to R7.3 billion (US$434.1 million) in the year to June despite a general economic downturn, significant cost-push due to weakness in the rand currency, global supply chain disruptions and declines in demand for some products.
The company said turnover was driven higher by an average price realisation of 2.6 percent and a mix benefit of 4.2 percent, although volumes declined by three percent, mainly in the over-the-counter and prescription medication businesses.
The gross margin declined from 39.4 percent to 37.3 percent, adversely impacted by the unfavourable exchange rate and expenditure in factors related to the Covid-19 pandemic.
Operating expenditure decreased by two percent, resulting in a 1.2 percent dip in trading profit to R944.3 million.
Headline earnings from continuing operations increased to R709.4 million from R701.0 million the previous year, translating into headline earnings per share from continuing operations of 417.5 cents, a decrease of one percent.
"‘This set of results has been achieved despite the depressed trading environment and the challenges that have been brought about by the Covid-19 pandemic, such as the significantly weak rand and unplanned expenditure," chief executive officer Andy Hall said.
"Despite these challenges we have remained focused on ensuring that we continue to produce and supply life-saving and acute medicines in South Africa that are much needed during the pandemic."
The company said it had to date had 262 Covid-19 cases, out of which 253 people had made full recoveries while three employees had succumbed to the virus.
Although the company was in a healthy financial position and generated strong cash flows in 2020, the pharmaceutical market had seen a slow-down subsequent to March.
The extraordinary levels of uncertainty in the economy and operating environment brought about by Covid-19 resulted in no final dividend being declared, with Adcock Ingram preferring to preserve cash until it understood the full impact of the health crisis.
"The uncertain lifespan of the pandemic will pose further risk on the current levels of weak demand which will negatively impact elements of the group’s portfolio," Hall said.
Adcock Ingram manufactures, markets and distributes a wide range of healthcare and consumer products and is South Africa’s largest supplier of hospital and critical care products.
- African News Agency (ANA)