WOOD Flash – Alkaloid AD Skopje: 2Q24 shows earnings remain on track

Alkaloid’s 2Q24 results keep the company on track to meet its FY24E earnings guidance – yoy EBITDA and net profit growth of 14% and 10%, respectively. A potential beat vs. the guidance is only likely to appear, in our view, in 4Q, on winter restocking and the first EU sales of its novel omeprazole formulation. In 2Q, revenues were affected positively by the first quarter of domestic sales for a government programme; the drugs supplied are: 1) rather expensive; but 2) low margin, as they are licensed in from foreign producers, so had a negative impact on the EBITDA margin (on the order of up to c.50bps, on our calculations). Offsetting this, however, were positive trends in the opex line and materially lower FX revaluation costs vs. 2023. In 1H24, the company delivered c.48% of its FY24E EBITDA and net profit guidance; again, with the seasonally strong 4Q yet to come, so we maintain a neutral view on the full-year earnings, with a potential positive surprise from the EU and omeprazole.