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Sanochemia Pharmazeutika AG: Nine-Month Financial Results 2008/2009

Increase in sales revenues | bottom line impacted by weak Q1, FX translation differences and higher expenses | cost-cutting programme yields positive Q3   

 

Vienna, 27 August 2009 – SANOCHEMIA Pharmazeutika AG, Vienna, listed in the Prime Segment of the Frankfurt Stock Exchange (ISIN AT0000776307) today announces figures for its 2008/2009 financial year to date (to 30 June 2009):

 

Positive third quarter (1 April to 30 June 2009)

Sales revenues in the third quarter of approx. €8m were on a par with the average turnover volumes of comparable quarters. The main revenue engines were radiological products and APIs. With clearly positive EBITDA, in the amount of T€ 1,110, and EBIT of T€ 68, in the third quarter it was again possible to post a positive operating result following the introduction of a cost-cutting programme in May.

 

Results for Q1-Q3 (1 October 2008 to 30 June 2009): consolidated sales revenues rose by seven percent to T€ 21,805 (PY: T€ 20,474). This rise in turnover was foremostly attributable to sales of radiological products, part of the Human Pharmaceuticals Division, and to a lesser extent the production of APIs and contract manufacturing activities.

 

The bottom line, however, remained below that of the comparable figure in the prior year due to negative currency translation differences, extraordinary items and higher costs. The planned increases in research and development spending (clinical trials and third-party services) and international marketing activities accounted for EBIT of minus T€ 3,901 (PY: minus T€ 2,916). The negative financial result, attributable to the revised, conservative investment strategy, in the amount of minus T€ 1,005 (PY: minus T€ 582) led to a pre-tax result (EBT) of minus T€ 4,906 (PY: minus T€ 3,498). The net result for the financial year to date fell to minus T€ 4,829 (PY: minus T€ 3,585), equivalent to minus € 0.46 (PY: minus € 0.33) per share.

 

Financial and assets positions | cash flow:

The value of cash and cash equivalents (available-for-sale securities and cash) amounts to approx. € 20 million. The equity ratio remains high at 57.5 percent, indicating the firm financial standing of the Company. Cash flow from operating activities improved from minus T€ 9,055 to minus T€ 7,045. This is largely accounted for by the closing out of foreign currency options and associated losses.

 

Segment reporting 

Human Pharmaceuticals – the main sources of revenues generated by this division are radiological products, diagnostics and other pharmaceutical products such as Viveo^®. Following a 14% increase, sales revenues in this segment rose to T€ 12,632 (PY: T€ 11,082). In total, the Human Pharmaceuticals Division already accounts for 58 percent of Group revenues. Despite higher marketing expenditures and a marked increase in personnel expenses, it was nonetheless possible to increase EBIT by eight percent from T€ 1,660 to T€ 1,789, a clear indication that the radiological products are the keys to bottom-line growth.   

The Production Division reported a two-percent increase in sales revenues from T€ 8,928 to T€ 9,070. This division engages in the production of APIs for in-house and third-party requirements in addition to classic contract manufacturing activities. The Production Division generated 42 percent of consolidated turnover. Higher costs of materials and a weak Q1 largely accounted for segment EBIT in the amount of minus T€ 2,234 (PY: minus T€ 807). 

 

R&D with central focus on oncology in 2009/2010:

PVP hypericine – from initial diagnosis to the treatment of bladder cancer

PVP hypericine, a substance patented by Sanochemia, makes it possible to identify difficult-to-detect and potentially malignant bladder tumours at an early stage. A concept for photodynamic treatment is being currently developed which, if successful, would be capable of replacing the majority of cytostatic therapies, which are associated with numerous negative side effects. If it proves possible to introduce this photodynamic treatment method, this would represent an entirely new therapeutic strategy for bladder cancer – Sanochemia is confident that this is achievable and is currently seeking development partners. The revenue potential of PVP hypericine is significant given that imaging diagnostics represent the key to successfully treating bladder cancer and to closely monitoring patients after successful treatment.  

 

Outlook

The main activities of the Group are now firmly focussed on the radiological segment which accounts for a growing proportion of consolidated revenues, already in excess of fifty percent. This is clear evidence that Sanochemia’s decision to enter the market for imaging agents was a well-founded one. In particular, developments to date underline the high potential for rising sales revenues and earnings on the strength of the imaging agents already on the market and the marketing authorisations in the pipeline.

 

A major restructuring of the Group, in order to improve its competitiveness and to achieve sustainable profitability, was initiated following the disappointing results in the first half of the current financial year. This extensive package of cost-cutting measures is aimed at achieving savings in the areas of material costs and personnel expenses of around four million euros, a proportion of which should be reflected in the results of the 2008/2009 financial period. 

 

Given the healthy state of the order books, the fourth quarter is expected to see similar development in terms of sales revenues and an improvement in bottom-line earnings.

 

Sanochemia’s Board of Management regards the action taken of late as setting the Company firmly on track to achieving value-oriented growth and to regaining the trust of the capital market. Due to the uncertain overall economic situation, it is not possible to issue more detailed forecasts at this stage.

 

The full nine-month financial results, including the segment reporting, may be requested from the company directly or viewed online at www.sanochemia.at.

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For further information, please contact:

Margarita Hoch

Investor Relations
Tel.: + 43 / (0) 1 / 3191456 - 335
Mobile: + 43 (0) 664 / 21 38 152 
m.hoch(at)sanochemia.at