London, 09 February 2009 - EastPharma (EAST LI), a company active in
the manufacturing and marketing of branded generic and in-licensed
pharmaceutical products in Turkey and other regional markets, is
announcing its expectations for the development of its business in
2009 on 12 February 2009.
In 2009, EastPharma is targeting net sales of TRY 500 mn
(approximately US$ 300 mn at the budget exchange rate of 1.6970) and
Ebitda of TRY 100 mn (approximately US$ 60 mn at the budget exchange
rate). Deva Holding, the flagship of EastPharma, successfully
completed its main investment plan totaling approximately US$ 100 mn
in 2008. During 2008, a significant amount of extraordinary, one-off
charges were incurred due to the move from the old to the new
production facilities as well as due to the extensive restructuring
efforts.
Our preliminary estimates of the effects including the opportunity
costs of our extraordinary items for 2008 are:
Moving of machinery, installation,
validation: ~ US$ 20 mn
Delay in opening of new
factories: ~ US$ 16 mn
De-stocking activity at the
wholesalers: ~ US$ 50 mn
Lost sales due to stock-outs, planned and unplanned: ~
US$ 4 mn
Total severance
payments: ~ US$ 10
mn
Total:
~ US$ 100 mn
Although the group had invested over US$ 100 mn and in addition had
incurred approximately US$ 100 mn in extraordinary charges, today's
consolidated net debt figure is only US$ 65 mn. The current net debt
figure is relatively low compared to total equity of US$ 466 mn as of
end of Q3 '08. It also compares favorably to the projected net sales
of approximately US$ 300 mn and to the projected Ebitda of US$ 60 mn
in 2009. EastPharma has shown its strong commitment to Deva and its
subsidiaries by making a capital advance payment of TRY 90 mn at Deva
during Q4 '08 (approximately US$ 55 mn at the exchange rate of
February 5). The approval from Turkish Capital Market Board (CMB) for
this capital increase is expected shortly.
We are pleased to report that the recently acquired Roche products
are performing well as expected. They are currently contributing
positively at all levels. Saba increased its sales and net profit
significantly during 2008 and will continue to contribute strongly to
group performance in 2009. In 2008, EastPharma ranks number 4 in the
Turkish pharmaceutical market in unit terms according to IMS data.
The group is aiming to improve the cost structure and profitability
as well as its competitive power by bringing new products to the
market.
We are looking forward to a stronger 2009. As the new facilities are
now almost fully completed, we expect a positive effect by lifting
production constraints, which have cost us approximately US$ 40 mn
(including moving of machinery, installation, validation, delay in
opening of new factories and lost sales due to stock-outs, planned
and unplanned) in 2008. In addition, we were not active in tender
sales due to the limited availability of products during the
transition year of 2008. However, as these restrictions are now
lifted, we will be active in tender sales in 2009 and will take
advantage of the fact that our new facilities are now fully
operational.
During 2009, further growth contributions are expected from contract
manufacturing as well as exports.
All of the factors mentioned above will mark our company performance
in 2009.
A conference call with EastPharma management will be held at 1:00pm
London time on 12 February (08:00am US East Coast time / 3:00pm
Istanbul time). Dial-in details are provided below.
Dail-in Number: +1-518-825-1300
Access Code: 532386 (followed by the # key)
For further information, please contact:
EastPharma
Idil Bora
EastPharma Investor Relations
Tel: + 90 (212) 6929326
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This announcement was originally distributed by Hugin. The issuer is
solely responsible for the content of this announcement.
