Olainfarm#ins_quot2#s 1st quarter profit increases by more than 1 million euros; EBITDA


Olainfarm#ins_quot2#s consolidated profit and loss account for the 1st quarter of 2009 shows that sales of the concern has increased by 3% compared to the first quarter of 2008, while the net profit has reached 466 thousand lats (663 thousand euros). Such a rapid improvement in financial indicators reflects successful operations of Olainfarm abroad and in Latvia and proves that strengthened marketing effort started last year in Russia and other CIS countries is starting to bring returns.

Unaudited consolidated profit and loss statement for the 1st quarter of 2009 shows the consolidated sales of Olainfarm reaching 5.56 million lats (7,92 mill. euros), which is an increase of 3% compared to 5.41 million lats (7,70 mill. euros), which were the sales in similar period of 2008. The concern worked with the net profit of 465 713 lats (662 650 euros), while it was loss making in the 1st quarter of 2008, when loss reached 355 444 lats (505 751 euros).

„Returns on investments in strengthened marketing combined with company#ins_quot2#s cost cutting efforts have allowed the company to become profitable again. In May we have restarted the cooperation with the British daughter company of multinational pharmaceutical company Novartis and have received an order for shipment of chemical product worth 1 million euros which will take place this year. This is very good news for the company in this situation when certain macroeconomic instability remains. “says Valerijs Maligins, CEO of Olainfarm.

The above mentioned improvements in sales and margins have also influenced the levels of EBIT and EBITDA. For the first quarter of 2009 EBIT was 577 145 lats (821 203 euros), while during the same period of 2008 it was negative -195 984 lats (278 860 euros). EBITDA too was performing well in the first quarter of 2009 when it nearly tripled to 1 204 787 lats (1 714 257 euros).

During the 1st quarter of 2009 sales to markets where marketing effort has been strengthened continued increasing. Sales to Russia grew by 49%, to Latvia by 27%, to Georgia by 97%, to Moldova by 39%, Azerbaijan by 219%. Countries like Ukraine, Belarus and Kazakhstan, where significant devaluations of local currencies have taken place during the last few months, despite the decrease of local purchasing power, the sales remained nearly unchanged.

Olainfarm is one of the biggest companies in the Baltic States with more than 35 years of experience in production of medicines and chemical and pharmaceutical products. The basic principle of Concern#ins_quot2#s operations is to produce reliable and effective top quality products for Latvia and the rest of the world. Currently the products of Concern are being exported to more than 30 countries worldwide, including the Baltics, Russia, CIS, Scandinavian and other Western European countries, Asia and the USA.

Information prepared by:
Salvis Lapinsh
Deputy CFO
JSC Olainfarm
Rupnicu iela 5, Olaine
Latvia, LV 2114
Tel: + 371 6 7013 717
Fax: + 371 6 7013 777
Cell: + 371 2 6448 873
E-mail: slapinsh@olainfarm.lv