Last checked at 31 Jul 2008 07:00
BEXIMCO PHARMACEUTICALS LTD.
31st July, 2008
Half Year Results - 2008
Beximco Pharmaceuticals Limited ("BPL" or "Company"; AIM Symbol: BXP) today announces its results for the half year to 30th June 2008.
Highlights
Products and Markets
Received marketing authorization from "Instituto de Salud Publica de Chile" (Drug Regulatory authority in Chile) for a number of products. With this approval BPL has become the first Bangladeshi pharmaceutical company to obtain product registration in any Latin American country. Product export to commence soon.
Received marketing authorization for 24 new products in international markets.
Afghanistan, Solomon Islands and Kiribati have become new international market destinations.
Signed distribution agreements in four new international markets.
Signed a Long Term Arrangement with the Global Supply Division of UNICEF (Denmark) to supply 60,000 units CFC-free metered dose inhaler product over a two-year contract period.
The first company in Bangladesh to launch a specially designed innovative 'gum' formulation incorporating Ascorbic acid or vitamin C for use by children..
Corporate
Facility installation has been completed for SVP (Small Volume Parenterals), Opthalmics and Nebulizer solution projects. The commercial production of these three new product lines will commence towards the end of the first quarter 2009.
The addition of three more lines in the new Oral Solid Dosage (OSD) facility was kept on hold for completion of the TGA (Therapeutic Goods Administration) Australia, inspection which we are now expediting. At least one of these three lines will be installed and fully operable before the end of 2008.
4 MW [Mega Watt] Power Plant Project is now complete and operational.
BPL is one of the few pharmaceutical companies in the world that are currently producing technology driven CFC-free HFA Metered Dose Inhalers (MDIs). Based on the very encouraging responses for the MDI products, particularly the CFC-free MDIs from Central and Latin America and Middle East countries, BPL has undertaken a project to set up a 10 million unit capacity plant beside the existing MDI facility. The project is now in progress.
As the costs of pharmaceutical raw materials and excipients are rising sharply at a global level and as this has a significant impact on the bottom line, the Company is proactively dealing with the Bangladeshi drug regulatory authority to adjust prices for certain products. The Company is also reviewing prices for all international markets to maintain and improve on the bottom lines.
Banking related issues have been resolved. The Letter of Credit limit has been increased from Tk. 250 million to Tk. 500 million. Cash Credit Limit has also been increased from Tk. 570 million to Tk. 930 million. We are further negotiating for additional working capital funding to support export growth beyond 2009.
BPL has received approval (GMP Clearance) from the Therapeutic Goods Administration (TGA), Australia for its Metered Dose Inhaler & Spray and new Oral Solid Dosage (Tablet, Capsule) manufacturing facilities. BPL is the first Bangladeshi company to receive this regulatory approval of TGA, Australia through a stringent facility audit process. Under Mutual Recognition Agreements (MRA), TGA's Certificate of GMP Compliance is recognized by over 20 developed countries including Austria, Belgium, Canada, Denmark, France, Germany, Ireland, Italy, Netherlands, Norway, Spain, Sweden, Switzerland, and the UK.
The joint inspection committee of the Ministry of Health of Gulf Cooperation Council (GCC) countries has recently audited the manufacturing facilities of BPL. The GCC is considered as one of the most active trade blocs in the world and the member states are Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. BPL will commence exporting medicines to this region (total pharmaceutical market valued at over US $4 billion) after receiving approvals from the Executive Board of the Health Ministers' Council for Cooperation Council States, which the Company expects to receive during the third quarter of 2008.
Financial
Net sales decreased by 15.4% to Tk. 1659.3m (2007: Tk. 1960.4m)
Profit before tax decreased by 25.7% to Tk. 201.1m (2007: Tk. 270.6)
EPS decreased by 35.6% to Tk. 1.32 (2007: Tk. 2.05)
Nazmul Hassan, CEO of Beximco Pharmaceuticals, commented:
"We have now recovered from the banking-related issues that we faced throughout 2007 and during the first quarter of 2008. We have returned to the market strongly, rapidly improving the product supply issues. We see 2008 as a very challenging year for us in terms of ensuring product supply, ongoing project completion and international market expansion. We believe that we are on target to meet these challenges. Finally, receiving TGA, Australia's approval of our new oral solid dosage facility and inhaler facility is a major breakthrough for us in our goal to becoming a global pharmaceutical company".
The half yearly accounts can be viewed at the Company's website: www.beximcopharma.com
For further enquiries please contact:
Beximco Pharma
Nazmul Hassan, CEO
Tel: +880 2 861 9151, ext.2080
Libertas Capital
Aamir Quraishi/ Andrew Hardy
Tel: +44 (0)20 7569 9650
Financial Dynamics
David Yates / Jonathan Birt
Tel: +44 (0)20 7269 7169
Notes to Editors
About Beximco Pharmaceuticals Limited
Founded in 1976 and based in Dhaka, Bangladesh, BPL manufactures and sells generic pharmaceutical formulation products, active pharmaceutical ingredients and intravenous fluids. The Company also manufactures and markets its own branded generics for almost all diseases. The Company also undertakes contract manufacturing for multinational pharmaceutical companies. The Company operates from a 20 acre site in Dhaka and currently employs over 2,400 staff.
The Company's products are sold to retail outlets, medical institutions and other pharmaceutical manufacturers in Bangladesh, in regional markets such as Sri Lanka, Nepal, Bhutan, Vietnam, Cambodia and Myanmar and in other markets overseas, principally in East Africa, Pacific Island and Central American countries and South East Asia, including Singapore and Hong Kong.
END
BEXIMCO PHARMACEUTICALS LTD.
CHIEF EXECUTIVE OFFICER'S STATEMENT
Dear Shareholders,
We are pleased to publish the un-audited financial results for the half-year ending on June 30, 2008.
During the period the company achieved net sales of Tk. 1,659.3 million and pre-tax profit of Tk. 201.1 million as against Tk. 1,960.4 million and Tk. 270.6 million respectively of comparable period of the preceding financial year. The banking-related issues that we came across in 2007 were successfully negotiated by the end of 1st quarter of 2008. However, the continual effect of disruption in the supply chain persisted in most part of the period under review. With our banking problems being resolved, significant improvement have taken place in material and product availability since last month. We expect to achieve a normal product supply situation within third quarter of this year. You will be pleased to know that, despite product supply constraints, we have achieved 22.8% growth in export sales during the period under review. We have also entered into three new overseas markets namely Afghanistan, Solomon Islands and Kiribati, and have registered 24 new products in different international markets during the first half of the year.
Bangladesh economy is still struggling to get back to its expected pace. Inflation and the resulting price index significantly moved upward during this period. Drastic rises in the prices of essential commodities and significant increases in fuel prices has further deteriorated the situation.
The prices of pharmaceutical raw materials and excipients are rising sharply in the international markets. The improvement in the gross margin on comparable basis, as reported in this interim financial statement, is mainly due to the sales mix of relatively higher margin products in the current review period in comparison to the prior period. We are now proactively dealing with the local drug regulatory authority to adjust prices for some products. We are also reviewing prices for all our overseas markets to maintain and improve on the bottom line.
I am pleased to inform that we have received approval (GMP Clearance) from Therapeutic Goods Administration (TGA), Australia for new Oral Solid Dosage (tablet and capsule) and Metered Dose Inhaler & Spray manufacturing facilities. BPL is the first Bangladeshi company to receive this regulatory approval of TGA, Australia through a stringent facility audit process. This is incontestably a milestone achievement for us. We are also hopeful about the positive outcome of the audit carried out by the Joint Inspection Committee of the Ministry of Health of the Gulf Cooperation Council (GCC).
Credit Rating Information and Services Limited (CRISL) a Bangladeshi Company having Joint Venture with Rating Agency Malaysia Berhard, Malaysia and JCR-VIS Credit Company Limited, Pakistan has assigned A- (Pronounced as Single A minus) rating in the long term and ST-3 rating in the short term to BPL.
Nazmul Hassan
Chief Executive Officer
Balance Sheet (Unaudited)
As at 30th June, 2008
Amount in '000 BDT
| Notes | As at 30th June, 2008 | As at 31st December, 2007 | Growth % | |
| ASSETS | ||||
| Non-Current Assets | 9,203,809 ______ | 9,029,643 ______ | 1.93 ______ | |
| Property, Plant and Equipment- Carrying Value | 3 | 9,167,108 | 8,992,942 | 1.94 |
| Investment in Shares | 36,701 ______ | 36,701 ______ | 0.00 ______ | |
| Current Assets | 3,118,973 ______ | 2,923,776 ______ | 6.68 ______ | |
| Inventories | 4 | 1,753,902 | 1,652,480 | 6.14 |
| Accounts Receivable | 491,116 | 499,681 | (1.71) | |
| Loans, Advances and Deposits | 5 | 735,344 | 685,916 | 7.21 |
| Cash and Cash Equivalents | 6 | 138,611 ______ | 85,699 ______ | 61.74 ______ |
| TOTAL ASSETS | Tk. | 12,322,782 ______ | 11,953,419 ______ | 3.09 ______ |
| SHAREHOLDERS' EQUITY AND LIABILITIES | ||||
| Shareholders' Equity | 8,402,384 ______ | 8,250,940 ______ | 1.84 ______ | |
| Issued Share Capital | 1,145,070 | 1,145,070 | - | |
| Reserves | 7 | 3,916,693 | 3,916,693 | - |
| Retained Earnings | 3,340,621 ______ | 3,189,177 ______ | 4.75 ______ | |
| Non-Current Liabilities | 1,860,370 ______ | 2,074,507 ______ | (10.32) ______ | |
| Long Term Borrowing-Net off Current Maturity (Secured) | 8 A | 1,574,496 | 1,776,450 | (11.37) |
| Liability for Gratuity & WPPF | 240,171 | 246,705 | (2.65) | |
| Deferred Tax Liability | 45,703 ______ | 51,352 ______ | (11.00) ______ | |
| Current Liabilities and Provisions | 2,060,028 ______ | 1,627,972 ______ | 26.54 ______ | |
| Short Term Borrowing | 1,204,851 | 907,582 | 32.75 | |
| Long Term Borrowing-Current Maturity | 8 B | 476,547 | 343,604 | 38.69 |
| Creditors and other Payables | 248,231 | 271,814 | (8.68) | |
| Accrued Expenses | 54,146 | 60,053 | (9.84) | |
| Dividend Payable | 1,278 | 3,285 | (61.10) | |
| Income Tax Payable | 74,975 ______ | 41,634 ______ | 80.08 ______ | |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | Tk. | 12,322,782 ______ | 11,953,419 ______ | 3.09 ______ |
Profit and Loss Account (Unaudited)
For the Half-year ended 30th June, 2008
Amount in '000 BDT
| Notes | Half-year ended 30th June, 2008 | Half-year ended 30th June, 2007 | Growth % | |
| Net Sales Revenue | 1,659,337 | 1,960,408 | (15.36) | |
| Cost of Goods Sold | 9 | (886,772) ______ | (1,080,357) ______ | (17.92) ______ |
| Gross Profit | 772,565 | 880,051 | (12.21) | |
| Operating Expenses : | (455,800) | (514,853) | (11.47) | |
| Administrative Expenses | 10 | (69,211) | (69,831) | (0.89) |
| Selling, Marketing and Distribution Expenses | 11 | (386,589) | (445,022) | (13.13) |
| Profit from Operations | 316,765 | 365,198 | (13.26) | |
| Other Income | 686 | 15,094 | (95.46) | |
| Finance Cost | (106,298) ______ | (96,139) ______ | 10.57 ______ | |
| Profit Before Contribution to WPPF | 211,153 | 284,153 | (25.69) | |
| Contribution to Workers' Profit Participation/ Welfare Funds | (10,055) | (13,531) | (25.69) | |
| Profit Before Tax | 201,098 ______ | 270,622 ______ | (25.69) ______ | |
| Income Tax | (49,653) ______ | (35,872) ______ | 38.42 ______ | |
| Profit After Tax | 151,445 ______ | 234,750 ______ | (35.49) ______ | |
| Earnings Per Share (EPS) | 1.32 | 2.05 | (35.61) | |
| Number of shares used to compute EPS | 114,507,043 ______ | 114,507,043 ______ |
Statement of Changes in Equity (Unaudited)
For the Half-year ended 30th June, 2008
Amount in '000 BDT
| Half-year ended 30th June, 2008 | Half-year ended 30th June, 2007 | ||
| Shareholders Equity at Beginning of Period | 8,250,939 | 7,949,920 | |
| Net Profit for the period | 151,445 ______ | 234,750 ______ | |
| Shareholders Equity at the end of Period | Tk. | 8,402,384 ______ | 8,184,670 ______ |
Cash Flow Statement (Unaudited)
For the Half-year ended 30th June, 2008
Amount in '000 BDT
| Half-year ended 30th June, 2008 | Half-year ended 30th June, 2007 | Growth % | ||
| Cash Flows from Operating Activities : | ||||
| Cash Receipts from Customers and Others | 1,668,588 | 1,787,026 | (6.63) | |
| Cash Paid to Suppliers and Employees | (1,469,045) | (1,595,425) | (7.92) | |
| Cash Generated from Operations | 199,543 | 191,601 | 4.15 | |
| Interest Paid | (106,298) | (96,139) | 10.57 | |
| Income Tax Paid | (21,961) ______ | (17,498) ______ | 25.51 ______ | |
| Net cash Generated from Operating Activities | 71,284 | 77,964 | (8.57) | |
| Cash Flows from Investing Activities : | ||||
| Acquisition of Property, Plant and Equipment (net of IDCP) | (158,324) | (262,325) | (39.65) | |
| Disposal of Property, Plant and Equipment | - | 571 | (100.00) | |
| Net cash Used in Investing Activities | (158,324) | (261,754) | (39.51) | |
| Cash Flows from Financing Activities : | ||||
| Net (Decrease)/Increase in Long Term Borrowings | (155,310) | (28,819) | 438.92 | |
| Net (Decrease) / Increase in Short Term Borrowings | 297,269 | (361,542) | (182.22) | |
| Dividend Paid | (2,007) | (2,699) | (25.60) | |
| Net cash Generated from Financing Activities | 139,952 ______ | (393,060) ______ | (135.61) ______ | |
| Increase/(Decrease) in Cash and Cash Equivalents | 52,912 | (576,850) | (109.17) | |
| Cash and Cash Equivalents at Beginning of Period | 85,699 ______ | 581,099 ______ | (85.25) ______ | |
| Cash and Cash Equivalents at End of Period | Tk. | 138,611 ______ | 4,249 ______ | 3,162.20 ______ |
Selected Notes to the Financial Statements (Unaudited) For the Period ended 30th June, 2008
Amount in '000 BDT
1. Status and Activities
Beximco Pharmaceuticals Limited (BPL/the Company) is a public company incorporated in Bangladesh in 1976. The company is engaged in manufacturing and marketing of Pharmaceuticals Finished Formulation Products, Active Pharmaceutical Ingredients (APIs) and life saving Intravenous Fluids which it sells in the local as well as international markets. The company also provides contract manufacturing services. . The shares of the company are traded in Dhaka and Chittagong Stock Exchanges of Bangladesh and also in the AIM of London Stock Exchange.
2. Principal Accounting Policies
Basis of Preparation of Financial Statements
These interim financial statements should be read in conjunction with the Financial Statements for the year ended December 31, 2007 (hereafter referred to as the "Annual Financial Statements"), as they provide an update to previously reported information.
The accounting policies used are consistent with those used in the Annual Financial Statements. The financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRSs) including International Accounting Standards (IASs). The presentation of the Interim Financial Statements is consistent with the Annual Financial Statements. Where necessary, the comparatives have been reclassified or extended from the half yearly report of 2007 to take into account any presentational changes made in the Annual Financial Statements or in the half yearly report 2008. The preparation of the Interim Financial Statements requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities at the date of the Interim Financial Statements. If in the future such estimates and assumptions, which are based on management's best judgment at the date of the Interim Financial Statements, deviate from the actual, the original estimates and assumptions will be modified as appropriate in the period in which the circumstances change
3. Property, Plant and Equipment
| As at 30 Jun. 2008 | As at 31 Dec. 2007 | ||
| Cost | |||
| Land | 1,238,587 | 1,236,071 | |
| Building and Other Constructions | 1,047,308 | 1,047,308 | |
| Plant & Machinery | 1,465,994 | 1,448,468 | |
| Furniture & Fixture | 66,789 | 65,120 | |
| Transport & Vehicle | 126,377 | 126,377 | |
| Office Equipment | 234,302 | 228,591 | |
| 4,179,357 | 4,151,935 | ||
| Less :Accumulated Depreciation | (1,593,545) | (1,523,088) | |
| Written Down Value | 2,585,812 | 2,628,847 | |
| Capital Work in Progress | 6,581,296 ______ | 6,364,095 ______ | |
| Carring Value | Tk. | 9,167,108 ______ | 8,992,942 ______ |
4. Inventories
| As at 30 Jun. 2008 | As at 31 Dec. 2007 | ||
| Finished Goods | 400,849 | 331,438 | |
| Raw and Packing Material (Including WIP and Transit) | 1,143,270 | 1,117,642 | |
| Spares & Others | 209,783 ______ | 203,400 ______ | |
| Tk. | 1,753,902 ______ | 1,652,480 ______ |
5. Loans, Advances and Deposits
| As at 30 Jun. 2008 | As at 31 Dec. 2007 | ||
| Motor Cycle Loan | 62,603 | 62,295 | |
| Security and Other Deposits | 31,990 | 34,845 | |
| Prepaid VAT | 124,031 | 103,794 | |
| Advance for Capital Expenditure | 156,320 | 158,660 | |
| Advance for Expense | 36,910 | 27,952 | |
| Salary Advance | 42,544 | 27,672 | |
| Advance to material Suppliers including C &F Agents | 208,389 | 205,833 | |
| Others | 72,557 ______ | 64,865 ______ | |
| Tk. | 735,344 ______ | 685,916 ______ |
6. Cash and Cash Equivalents
| As at 30 Jun. 2008 | As at 31 Dec. 2007 | ||
| Cash In Hand | 3,254 | 2,140 | |
| Cash At Banks | 135,357 ______ | 83,559 ______ | |
| Tk. | 138,611 ______ | 85,699 ______ |
7. Reserves
| As at 30 Jun. 2008 | As at 31 Dec. 2007 | ||
| Share Premium | 1,489,750 | 1,489,750 | |
| Excess of Issue Price over Face Value of GDRs | 1,689,637 | 1,689,637 | |
| Capital Reserve | 294,951 | 294,951 | |
| Tax-Holiday Reserve | 442,355 ______ | 442,355 ______ | |
| Tk. | 3,916,693 ______ | 3,916,693 ______ |
8. Long Term Borrowing
| As at 30 Jun. 2008 | As at 31 Dec. 2007 | ||
| A. Non Current Maturity | |||
| Project Loan | 1,380,311 | 1,516,920 | |
| Interest and PAD Block | 173,579 | 223,811 | |
| Obligation Under Finance lease | 20,606 ______ | 35,719 ______ | |
| Tk. | 1,574,496 ______ | 1,776,450 ______ | |
| B. Current Maturity | |||
| Project Loan | 293,394 | 152,025 | |
| Interest and PAD Block | 154,560 | 159,478 | |
| Obligation Under Finance lease | 28,593 ______ | 32,101 ______ | |
| Tk. | 476,547 ______ | 343,604 ______ |
9. Cost of Goods Sold
| Half-year ended 30th June, 2008 | Half-year ended 30th June, 2007 | ||
| Raw and Packing Material | 698,057 | 884,137 | |
| Factory Overhead | 126,008 | 133,682 | |
| Depreciation | 62,707 ______ | 62,538 ______ | |
| Tk. | 886,772 ______ | 1,080,357 ______ |
10. Administrative Expenses
| Half-year ended 30th June, 2008 | Half-year ended 30th June, 2007 | ||
| Salary & Allowances | 40,221 | 37,473 | |
| Fuel, Repairs & Office Maintenance | 4,726 | 2,990 | |
| Traveling & Conveyance | 4,770 | 4,995 | |
| AGM and Company Secretarial Exp. | 6,247 | 10,959 | |
| Other Expenses | 10,429 | 10,389 | |
| Depreciation | 2,818 ______ | 3,025 ______ | |
| Tk. | 69,211 ______ | 69,831 ______ |
11. Selling, Marketing and Distribution Expenses
| Half-year ended 30th June, 2008 | Half-year ended 30th June, 2007 | ||
| Salary & Allowances | 136,280 | 139,860 | |
| Traveling & Conveyance | 69,749 | 74,652 | |
| Market Research & New Products | 7,526 | 10,641 | |
| Promotional Expenses including Sample & Literature | 91,263 | 119,569 | |
| Delivery Commission | 47,349 | 57,929 | |
| Depreciation | 4,932 | 5,015 | |
| Other Expenses | 29,490 ______ | 37,356 ______ | |
| Tk. | 386,589 ______ | 445,022 ______ |
12. Dividend for 2007
The Board of Directors of the company has proposed 5% cash and 10% stock dividend for the year 2007 which is subject to approval in the annual general meeting to be held on August 21, 2008. The company consistently follows the policy of recognising proposed dividend after its approval by the shareholders in the annual general meeting. Hence, the proposed dividend for 2007 has not been accounted for in this interim financial statements.