OREANDA-NEWS  On 18 November OJSC "VEROPHARM" [RTS:VRPH, MICEX:VFRM] announced its unaudited financial results for nine months of 2008 in accordance with the International Financial Reporting Standarts (IFRS).

Sales

Consolidated sales in 9M 2008 grew by 39% and reached USD 128 mln. in comparison with USD 92,1 mln. in 9M 2007.

The share of Rx drugs sales in 9M 2008 increased to 64% as compared to 55% in 9M 2007. The share of OTC drugs remained unchanged at 9% as compared to the same period in year before. The share of adhesive bandages remained unchanged at 19% as compared to the same period in year before. Portfolio of traditional drug sales as before demonstrate tendency for a decrease of share in sales – the decrease from 17% to 8%.

Veropharm sales as part of Federal Reimbursement Program (FRP) came to USD 3,7 mln. in 9M 2008, accounting for 2,9% of the Company’s total finished goods sales. By the results of 9M 2007, FRP sales were USD 4,3 mln., or 4,8% of the Company’s total finished goods sales. Sales of anticancer drug Bilumid through FRP accounted for 78% of the Veropharm total FRP sales in 9M 2008.

Sales within the Russian Federation accounted for 96% of the Company’s total finished goods sales in 9M 2008.

Profit

In 9M 2008 the gross profit of Veropharm increased by 51,1% and reached USD 83,7 mln. compared to USD 55,4 mln in 9M 2007. Gross margin increased to 65,4% as compared to 60,2% in 9M 2007.

The increase of the gross margin materialized in the following product segments: Rx drugs — from 74,3% to 74,5%; adhesive bandages – from 55,7% to 56,1%; OTC drugs (caused by price increase for the drugs “Xylen” and “Slabilen”) – from 56,1% to 57,7%. The gross margin in the traditional products decreased from 35,8% to 22,9%.*

In 9M 2008 EBITDA increased by 60,8% as compared to 9M 2007 and reached USD 39,4 mln. which makes 30,8% of Company’s total sales. In 9M 2007 EBITDA accounted for USD 24,5 mln., or 26,6% of the Company’s total sales.

The 9M 2008 net profit grew by 65% to USD 26,4 mln. which makes 20,6 % of Company’s total sales (an increase of 3,2 %  in comparison with 9M 2007).

Debt

As of the end of 9M 2008 the debt of OJSC “Veropharm” amounted to USD 18,9 mln. that represents less than 20% of Company’s net assets.