LONDON (Alliance News) - Cathay International Holdings Ltd swung to a loss in 2015, it said on Wednesday, as it was hit by drug price and margin pressure in the Chinese pharmaceutical industry.
Cathay, which invests in the Chinese healthcare sector, said its pretax loss for the year to the end of December was USD10.4 million, compared to a USD10.1 million profit a year earlier.
Revenue fell 19% to USD120.9 million from USD150.0 million, hit by the pricing and margin pressure in the Chinese market. What's more, new product promotion was slower than anticipated, Cathay said, resulting in any meaningful revenue contributions from new products being pushed into 2016.
Cathay said the price for inositol, a chemical compound used in drugs, remained under pressure, meaning the Haizi division did not contribute to profit.
Cathay also booked one-off costs in 2015 related to the strategic review of its ginkgo business and an inventory write-off due to flood damage.
"2015 has been another challenging year for Cathay due to changes in government policies, drug pricing, currency volatility and economic slowdown. Despite this, and in response to these anticipated headwinds, Cathay has diversified its product base and continued its strategy to build a solid business foundations over its three core businesses, namely pharmaceutical, health and aesthetic medicine, to diversify and re-establish growth," said Chief Executive Lee Jin-Yi.
Cathay shares were untraded on Wednesday, having last traded at 16.60 pence.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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