Results of activity of JSC “Olainfarm” in the first six months of 2005

28/12/2005

Results of activity of JSC “Olainfarm” in the first six months of 2005               


The Management Board of JSC „Olainfarm” has aggregated financial results of the

 activity of the company in second quarter of year 2005 and on July 27th, 2005,

adopted an unaudited financial report for 6 month.

In the second quarter of 2005 JSC „Olainfarm” has successfully continued

execution of the plan set in the beginning of the year. The amounts of sales and

manufacture of the products has been growing. The financial results of the first

quarter of year 2005 have been consistently positive as well.

The turnover of the company in the first six months of 2005 not only have corresponded

to adopted plan, but even have gone a little bit beyond that and reached 5,69 millions

 of lats (8,09 millions EUR). Thus, the production sales plan for the first six moth

is fulfilled by 106,7%. The turnover of the company for the mentioned period has

 increased by 1,7 millions of lats (2,42 millions EUR) and by 43% exceeds turnover

of the analogical period of 2004. Such growth of sales amounts has been facilitated

by marketing activities of the company as well as successful participation in the

Russian federal state social aid program. Presently the greatest increase of sales

of JSC „Olainfarm” manufactured products is observed on the Ukraine and Kazakhstan

 markets. In June it turned 5 years from the opening of JSC „Olainfarm” representation

 in Kazakhstan.

Owing to increase of turnover profit of JSC „Olainfarm” in 6 month of year 2005 has

reached 0,231 millions of lats (0,329 millions EUR), which by 0,229 millions of lats

(0,327 millions EUR) exceeds results  of the corresponding period of the previous year.

 Thus, profit per share coefficient (EPS) presently constitutes Ls 0,0225 (0,032 EUR)

 per one share.

Positive changes can be observed also in the dynamics of the main financial stability

 indices. Overall solvency ratio for the reporting period is 1,02 and its value is optimal.

 Overall liquidity ratio comparing to the first half-year of 2004 has decreased from 2,79

to 2,67 and is approaching optimal value of this index. The debtors turnover ratio has

noticeably decreased from 283 days in the corresponding period in year 2004 to 191 days

in the first six month of 2005.

At the second half year of 2005 the company is planning to engage actively in the

reconstruction of chemical products manufacturing circuits and warehouses. This is the

second stage of introduction of Good manufacturing practice. It should be carried out in

 accordance with requirements of EU and Latvian normative acts, just like the

reconstruction of finished drug forms manufacturing site, which was completed on 2004.

In total it is planned to invest over 4 millions of lats (5,69 millions EUR) in the

reconstruction of chemical products manufacturing site and introduction of Good

 manufacturing practice during the nearest two years, from which approximately 2 millions

of lats (2,85 millions EUR) must be invested during this year. Partly these expenses should

be covered from the sale of newly issued shares. The questions on the increase of share

capital and issue of shares will be reviewed on the annual JSC „Olainfarm” shareholders

meeting which will be held on July 29th, 2005.