A&D Pharma: 1H2007 preliminary figures reveal improved performances

Following the company’s release, A&D pharma expects to report consolidated unaudited net sales of EUR 199.1m for the first six months of the year, revealing a 35% increase y/y, following continued market share gains. Mediplus, the company’s wholesale division, is expected to contribute to net sales with some EUR 170.1m, up 33% y/y as a result of strengthening its position as a market leader in Romania, with a market share of 21% (for drugs’ sales to pharmacies), compared to 19% for the same period ended June 2006. The retail arm (9 USD, -0,58%), Sensiblu SRL is expected to report unconsolidated sales of EUR 56.2m, up 35% y/y. In August, Mediplus was selected by Colgate-Palmolive to distribute its oral care and cosmetics portfolio in the Romanian market, to Sensiblu and third-party pharmacies across the country. The company’s dividend policy regarded the distribution of some EUR 3.56m worth dividends, resulting a payout ratio of 20% and the shareholders received the dividend payment on 3 July 2007 (EUR 0.0178/share – dividend value). Moreover, A&D Pharma has engaged a new auditor, BDO CampsObers Audit& Assurance BV and re-started the audit process for the Dutch statutory financial statements for 2006, following the issues arising in relation to the work of company’s previous statutory auditor.

Our view: We expect this news to have a positive trading impact, as it reveals the company’s great performances for the first half of the year. As the Romanian pharmaceutical market grew by roughly 21% y/y, A&D Pharma managed to outpace the market’s rhythm (33% for wholesale division and 35% for retail arm) and increase its market share on both divisions.