In February Olainfarm Group established a subsidiary in Russia; Group’s revenues in January were EUR 7.6 million
JSC Olainfarm has taken further steps towards a sustainable sales growth in the future, in February the Group established a subsidiary in Russia. With the aim to facilitate advertising and distribution of products, market research and other sales related functions, which previously were provided by third parties. Such a step will allow to better manage sales processes and have better control of the expenses. For local partners this is a strong signal that the Russian market is important for the Olainfarm Group and has plans to be in this market in the long term.
Consolidated sales in January reflect what has been previously forecasted and show that the Latvian market shares were 45%, and in absolute figures were at the same level as the year before. In the Central Asian countries revenues increased by 51%, reaching EUR 0.8 million. Sales substantially improved in the Caucasian region and in other countries by 160% and 44%, respectively. However, there was a decline in Belarus by 11% and in the EU countries by 44%. There were almost no sales in Russia and the Ukraine due to a large volume of goods that were shipped at the end of 2019, which also included goods for January.
“Overall, the January results reflect what we have previously forecasted, deliveries to major markets already increased at the end of last year. In January of last year, the turnover was unusually high as the best-selling products were approaching the end of the registration renewal period. In February of 2020, we expect the sales to return to the budgeted levels for Q1 2020, so the first quarter results will be as expected. We have a clear vision on how to further grow sales to meet our goals set for 2020, and I am confident the leadership will live up to this. I am also proud that the implementation and audit of the project “Introduction of experimental technology for manufacturing of new products at JSC Olainfarm” in collaboration with the European Regional Development Fund was successfully completed this year. Altogether 253 components of an experimental production line were delivered and installed for a total value of EUR 6.4 mln. Innovation is critical for the manufacturing process of JSC Olainfarm in order to build a sustainable future with new products we are anticipating to launch as part of Olainfarm’s growth strategy,” says Jeroen Weites, Chairman of the Management Board of JSC Olainfarm.
| January 2020, consolidated results | Sales, mil. EUR | Share in total sales | Compared to January 2019 |
| Latvia | 3.38 | 45% | -0.5% |
| Belarus | 1.981 | 26% | -11% |
| Central Asia | 0.801 | 11% | 51% |
| EU countries | 0.767 | 10% | -43% |
| Other countries | 0.377 | 5% | 44% |
| Caucasian countries | 0.202 | 3% | 160% |
| Russia | 0.05 | 1% | -98% |
| Ukraine | 0 | 0% | -100% |
| Total | 7.559 | 100% | -39% |
The Central Asian region includes Uzbekistan, Kazakhstan, Tajikistan, Kyrgyzstan, Mongolia and Turkmenistan;
The EU country region includes all of the European Union member states except for Latvia;
Other countries includes all of the countries in the world, which are not included in any other groups;
The Caucasian countries are Georgia, Armenia and Azerbaijan.
Unconsolidated sales in January
According to the preliminary unconsolidated figures, JSC Olainfarm sales reached EUR 4.9 million in January, which represents a decrease by 51% compared to January, 2019. Sales of products in January improved only in Central Asia, the Caucasian countries and in the other countries by 50%, 12% and 105%, respectively. Sales in January declined in Latvia by 3%, Belarus by 18% and in the EU countries by 50%.
It is important to note that in January, 2019 revenues were above average due to the fact that the company had to renew registration of some final dosage forms in the largest markets which facilitated additional deliveries of product inventory.
| January 2020, unconsolidated sales | Sales, mil. EUR | Share in total sales | Compared to January 2019 |
| Latvia | 1.595 | 32% | -3% |
| Belarus | 1.585 | 32% | -18% |
| Central Asia | 0.775 | 16% | 50% |
| EU countries | 0.626 | 13% | -50% |
| Other countries | 0.369 | 8% | 105% |
| Caucasian countries | 0.087 | 2% | 12% |
| Ukraine | 0 | 0% | -100% |
| Russia | 0 | 0% | -100% |
| Total | 4.909 | 100% | -51% |
Results of subsidiaries in January
The pharmacy chain Latvijas aptieka sales reached EUR 2.4 million in January, 2020, which represents a 2% increase compared to January, 2019. 68 pharmacies were operating during this period. Silvanols sales reached EUR 0.4 million in January, 2020, representing a decrease by 17% vs. January, 2019. The combined sales of Tonus Elast and Elast Medical in January, 2020 were EUR 0.5 million, which is 2% less than this time last year. Olainmed and Diamed Medical Center sales reached EUR 0.3 million, while the Belarusian subsidiary NPK Biotest reached EUR 0.28 million in sales in January, which is 6% higher than in January of last year.
| January 2020 | |
| Sales markets of Olainfarm | 28 |
| Sales markets of the Group | 33 |
| Number of pharmacies | 68 |
| Sales of Latvijas aptieka, mil. EUR | 2.386 |
| Sales of Tonus Elast and Elast Medikl, mil. EUR | 0.520 |
| Sales of Silvanols, mil. EUR | 0.401 |
| Sales of Medical centers, mil. EUR | 0.303 |
| Sales of NPK Biotest, mil. EUR | 0.280 |
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 the 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
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