Olainfarm Group’s turnover increased by 3.4% in the first quarter

The turnover of the pharmaceutical manufacturer JSC “Olainfarm” in the first quarter of this year was 33.499 million euros, which is 3.4% more than in the corresponding period of 2020, while the group’s profit has increased 2.4 times and was 5.149 million euros, according to the company “Nasdaq Riga”.

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“We have started the year with a focused approach, despite the impact of the Covid-19 pandemic, and this is reflected in the company’s financial results. The new marketing strategy was the driving force to maintain our products and services in the markets. We are committed to the strategy and investments in manufacturing, product development, information technology (IT) and digitization, “said Jerun Weitess, Chairman of the Board of Olainfarm.

The management report of the company’s financial statements states that in contrast to the decline in the pharmaceutical market, sales of Olainfarm products continued to grow. One of the reasons for the growth was the successful implementation of the new business model in Ukraine, Russia and Kazakhstan, as well as a professional and well-organized marketing team in Latvia.

The management report mentions that in the first three months of 2021, the largest sales volume of the group was in Latvia, amounting to 10.071 million euros, which is 13% or 1.446 million euros less than in the corresponding period last year. Sales in Latvia in the first quarter of this year accounted for 30% of the group’s total revenue.

Sales in Russia in the first quarter of 2021 amounted to 9.081 million euros, which is 94% more than in the first quarter of 2020, while sales in Belarus amounted to 1.891 million euros, which is 34% less. “The drop in demand in Belarus is closely linked to the political and economic crisis, the depreciation of the Belarusian ruble against the euro, and the application of a 10% value added tax on medicines from February 2021,” the management report said. In Ukraine, on the other hand, turnover increased by 84%, reaching 3.36 million euros, which is related to the activation of the agency’s marketing activities since the fourth quarter of 2020.

At the same time, the most significant factor influencing the Group’s profit growth was exchange rate fluctuations.

In the first quarter of 2021, the Olainfarm Group continued to implement precautionary measures in connection with the Covid-19 pandemic both in the plant and in the administrative and sales structures, as well as provided the opportunity to perform work duties remotely, if the specifics of the work allow it.

Several companies of the group used the opportunities provided by the Latvian state to receive financial support for mitigating the effects of Covid-19 and motivating medical staff. In total, in the first quarter of 2021, the group companies received financial support from the Latvian state in the amount of 85 thousand euros.

“The spread of the pandemic affected the results of the group’s subsidiaries. In retail, a significant decrease in demand was due to statutory restrictions on physical visits and organization of retail space in outpatient facilities, shopping centers. The compression product segment, which includes medical devices, was the most affected.” stated in the management report.

The company’s management also points out that the drop in demand for the leading product category in the range of health-promoting products – products for the treatment of cold symptoms – has a significant impact. Sales of cold and cough products are declining in all countries due to Covid-19 restrictions and low incidence of acute respiratory viral infections (ARVIs) in 2021. “In most countries, demand for cough and cold products has fallen sharply due to controlled use of masks and less physical contact between people working from home. preparations, “said the management report.

In the first quarter of this year, the Group has invested in the development of active pharmaceutical ingredients production technologies and new products – finished dosage forms, including the European Union (EU) co-financed project “Active Pharmaceutical Ingredients Research” and the Latvian Investment and Development Agency “Innovation Voucher Support Services”. Investments have also been made in pre-clinical and clinical trials of medicines, including the EU co-funded project “Pre-clinical and Clinical Trials in Medicines”.

In the first quarter of 2021, investments were mainly made in the field of production, product development, IT and digitization.

“The constraints and economic consequences of the Covid-19 pandemic have significantly affected the Group’s ability to realize the receipt and execution of planned investments and partially postpone their implementation to the second half. Total realized investments in the first quarter of 2021 accounted for 36% of the plan,” the management said.

It has already been reported that the turnover of the Olainfarm group last year was 122.157 million euros, which is 11% less than in 2019, while the group’s profit decreased 2.3 times and was 9.478 million euros.

In the first quarter of 2020, the Olainfarm Group’s turnover was 32.393 million euros, but the group’s profit was 2.113 million euros.

Olainfarm manufactures finished dosage forms, pharmaceuticals and food supplements, as well as chemicals and active pharmaceutical ingredients. The largest shareholder of Olainfarm is Olmafarm (42.56%), which is owned in equal shares by Valeria Maligina’s heirs – Irina Maligina, Anna Emilia Maligina and Nika Saveljeva. Olainfarm shares are listed on the official list of Nasdaq Riga.

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