JSC Grindeks audited financial results for twelve months of 2014

JSC Grindeks audited financial results for twelve months of 2014


Today, on 30 April, the JSC Grindeks submitted the audited consolidated financial statements for twelve months of 2014 to “Nasdaq Riga”. Audited financial results indicate that the Group closed 2014 with a net loss of 2.5 million euros related to the shareholders of the holding company. In comparison the Group’s net profit in 2013 was 13.5 million euros.

The Group’s turnover amounted to 88.5 million euros in 2014, which is by 30 million euros or 25% less than in 2013. In 2014, gross profit margin of the Group was 54%, whereas, net profit margin was -2.9%. Products of the Group, manufactured in 2014, were exported to 60 countries worldwide for the total amount of 83 million euros, which is by 29.3 million euros or by 26% less than in 2013. The geopolitical situation in Russia and Ukraine is the key factor affecting Group performance indicators. Most of the Group financial losses are related to the dramatic decline in the value of Russian ruble – consequently, foregone earnings of the Group makes at least 6.2 million euros.

In the end of the reporting period the amount of accounts receivable (debtors) was 58.0 million euros, which is by 6.4 million euros more than accounts payable (liabilities) that were 51.6 million euros. The dividend payment was paid in the 10 March 2015 in the amount of 9 million euro is included in the accounts payable. In its turn, the amount of current assets in the end of reporting period was 79.2 million euros, which is by 40.2 million euros more than current liabilities which was 39.0 million euros.  It should be noted that geopolitical situation in Russia and Ukraine has an effect not only on Latvian but on other foreign pharmaceutical companies as well, including Grindeks cooperation partners. To a certain extent it affects the cash flow, although, Grindeks assesses the overall financial situation as stable.

Statement of comprehensive income for the year 2014

Net sales88,487,515118,461,10667,888,03798,879,951
Cost of goods sold(40,461,842)(47,372,776)(38,482,256)(46,379,590)
Gross profit48,025,67371,088,33029,405,78152,500,361
Selling expenses(23,307,179)(25,380,681)(18,787,850)(20,515,080)
Administrative expenses(12,084,293)(12,180,968)(8,060,950)(9,219,169)
Other operating income2,961,6698,278,4991,945,7061,126,177
Other operating expenses(17,255,921)(25,539,497)(7,577,595)(11,728,884)
Changes in fair value / impairment loss224,045
Interest income and similar income164,655146,963224,908196,624
Interest expenses and similar expenses(299,901)(254,937)(234,955)(254,937)
Real estate tax(105,899)(90,277)(54,895)(53,954)
(Loss)/ profit before taxation(1,901,196)16,291,477(3,139,850)12,051,138
Corporate income tax(634,998)(2,782,254)(228,472)(2,065,085)
NET (LOSS)/ PROFIT FOR THE YEAR(2,536,194)13,509,223(3,368,322)9,986,053
Other comprehensive (loss)/ income
Foreign currency revaluation(8,554)(131,310)
Total other comprehensive (loss)(8,554)(131,310)
Total comprehensive (loss)/ income(2,544,748)13,377,913(3,368,322)9,986,053
Attributable to:
Equity holders of the parent(2,540,171)13,505,259(3,368,322)9,986,053
Non-controlling interest3,9773,964
Comprehensive (loss)/ income attributable to:
Equity holders of the Parent entity(2,548,725)13,373,949(3,368,322)9,986,053
Non-controlling interest3,9773,964
Earnings per share attributable to the equity holders of the Parent entity (EUR per share)
Earnings per share(0.27)1.41(0.35)1.04

Sales volume of the final dosage forms of Grindeks in 2014 was 79.45 million euros and has decreased by 20.9 million euros or 21% in comparison to 2013. The main final dosage forms markets are Russia, other CIS countries, Georgia and the Baltic States. The sales amount in Russia, other CIS countries and Georgia reached 60.5 million euros in 2014, which is by 26.2 million euros or 30% less than in 2013. The highest increase, compared to 2013 is shown in Armenia +50%, Belarus +21%, Azerbaijan +17%, and Turkmenistan +12%. In its turn, turnover of the final dosage forms in the Baltic States and other European countries was 18.5 million euros, which is by 4.9 million euros or 36% more than in 2013. In 2014 Grindeks has begun export of final dosage forms to several new markets – Great Britain, Finland, Slovakia, Spain, the Netherlands and Portugal. In 2014 cooperation was successfully continued with Tunisia, increasing sales volume 2.7 times in comparison with 2013, with Vietnam, increasing sales volume 4.3 times, with Romania, increasing sales volume 3 times. Comparing with 2013 the turnover in 2014 in markets outside the CIS and the Baltic states increased 3.7 times.

In 2014, sales of active pharmaceutical ingredients reached 9 million euros which is by 9 million euros or 50% less than in 2013. Main markets of Grindeks active pharmaceutical ingredients in 2014 were the Netherlands, Germany, Canada, USA, France, Ireland and Japan. The most required active pharmaceutical ingredients of Grindeks are Zopiclone, Oxytocin, Ftorafur, Droperidol, Xylazine, Medetomodine, Detomidine and Ursodeoxycholic acid.

Despite unfavorable situation in the main final dosage form markets, in 2014 the Group continued it’s strategically most important research and development projects in. In cooperation with Latvian scientists the project of inhibitor of cardio protective agent – GBB hydroxyls with an original structure – chemical and preclinical pharmacological efficiency studies have concluded, which is an important step in creating a new medical product. The other project is registration of a drug Mildronate® in China, where the 3rd phase of clinical trial for this medication is now being held.

JSC Grindeks Chairman of the Board Juris Bundulis: “Considering Grindeks experience in organizing business in 60 countries worldwide, the company is assured that business diversification and focused restructuring activities will lead to positive results. In the next period Grindeks will increasingly put emphasis on new markets, thereby diversifying its activities and reducing risks. The company previously had also faced different crisis situations and was able to professionally concentrate its knowledge and resources to overcome the obstacles.”

JSC Grindeks audited financial results for twelve months of 2014 (981 KB)

JSC Grindeks Corporate Governance Report of 2014 (311 KB)

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