China Healthcare division

21 Jan 2008 07:00

Hutchison China Meditech Limited21 January 2008 Hutchison China MediTech Limited ("Chi-Med") (AIM: HCM) Strong growth in China Healthcare division Streamlining of product range set to further improve financial performance London, 21st January 2008: Chi-Med, the Hutchison Whampoa backed pharmaceuticaland healthcare Group, today announces very strong growth in revenues andoperating profit in its China Healthcare division as well as the discontinuationof its loss making Nao Ling Tong memory supplement ("NLT") thereby materiallyimproving the division's profits for the current 2008 financial year. All following 2007 figures are unaudited and may be subject to change. While performance on NLT improved marginally in 2007, with operating lossesnarrowing to -US$2.4 million (2006: -US$2.9m), its performance contrasted withthe rest of Chi-Med's China Healthcare division where sales grew 28% to US$61.4million (2006: US$48.1m) and operating profit grew 27% to US$6.8 million (2006:US$5.4m). Mr. Christian Hogg, CEO of Chi-Med, said: "The continuing operations of our China Healthcare division have succeeded toout-perform the rapidly growing and still highly fragmented China healthcaremarket. Net profit after tax on these continuing operations, attributable toChi-Med equity holders, reached US$4.5 million in 2007 and we expect this tocontinue to grow organically at similar rates." Discontinuing NLT will eliminate the operating losses of this product line andwill materially increase projected profits for Chi-Med's China Healthcaredivision in 2008 and beyond. A one-off provision of US$2.6 million, of whicharound US$2.1 million is non-cash in nature, will be taken in the 2007 accountsto cover charges associated with the discontinuation of the NLT. Chi-Med nowholds US$67.2 million in cash and guaranteed bills receivable and plans toutilise a portion of this in 2008 to augment China Healthcare division profitsthrough selective earnings enhancing acquisitions. Chi-Med will be announcing its preliminary financial results for 2007 inmid-March. Ends Enquiries: Chi-Med Telephone: +852 2121 8200Christian Hogg, CEO Citigate Dewe Rogerson Telephone: +44 (0) 20 7638 9571Anthony Carlisle +44 (0) 7973 611 888David Dible +44 (0) 7967 566 919 About Chi-Med Chi-Med is the holding company of a pharmaceutical and healthcare group focusedon Traditional Chinese Medicine (TCM) based primarily in China and was admittedto trading on the Alternative Investment Market of the London Stock Exchange inMay 2006. Chi-Med operates three core business segments: 1) China healthcare -the manufacture, distribution and marketing of pharmaceuticals and healthsupplements in China; 2) Drug R&D - the discovery and global development ofnovel drug in the oncology and auto-immune therapeutic areas; and 3) Consumerproducts - global retailing and distribution consumer health and personal careproducts derived from TCM and botanical ingredients. Chi-Med is majority owned by Hutchison Whampoa Limited, an internationalcorporation listed on the Main Board of The Stock Exchange of Hong Kong Limited. This information is provided by RNS The company news service from the London Stock Exchange