According to the company's press release, Veropharm's topline growth was 22.5% y-o-y to $24.14 mln, which is squarely in line with the company's preliminary data. The share of prescribed (Rx) medicines grew from 49.6% in Q106 to 52.6% in Q107. The share of non-prescribed (OTC) medicines rose to 10.1% from 8.3% in Q106. Since costs grew weaker than earnings, Veropharm managed to ensure more than a 32% rise in gross profit to $15.4 mln.
Q107 headline financial indicators, $ mln
| | Q106 | Q107 | Q107/ Q106 |
| Revenue |
19.71 |
24.14 |
22.5% |
| COGS |
8.06 |
8.74 |
8.4% |
| Gross profit |
11.65 |
15.40 |
32.2% |
| Gross profit margin |
59.1% |
63.8% |
|
| SG&A |
6.86 |
9.09 |
32.5% |
| Operating profit |
4.79 |
6.31 |
31.7% |
| Operating profit margin |
24.3% |
26.2% |
|
| EBITDA |
5.4 |
7.1 |
31.2% |
| EBITDA margin |
27.3% |
29.3% |
|
| Net profit |
3.1 |
5.5 |
77.5% |
| Net profit margin |
15.7% |
22.8% |
|
Source: Company data, Finam estimates
EBITDA climbed 31% y-o-y to $7.1 mln. The fact the Veropharm's net profit soared 77.5% to $5.5 mln in the reporting period is largely attributable to writing off income tax reserves.
We are upbeat on Veropharm's improved sales and considerably stronger margins: up by an average 2% on Q106. The main growth factors for the company's margins are a rise in the value-added segment of Rx medicines and considerably stronger gross margins of Veropharm's OTC and traditional medicine. In particular, gross margin of OTC medicines climbed over 6% y-o-y in Q107.
In our opinion, the company's further plans to improve its operating efficiency by focusing on high-tech production and expanding the brand portfolio in the Rx segment, which is value-added, will enable the company to strengthen margins in the mid term.
According to our estimates, the estimated fair price of Veropharm is $38.14 per share.
0.244
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