OREANDA-NEWS. September 4, 2012. OJSC Pharmacy Chain 36.6 [RTS: APTK; MICEX: RU14APTK1007] - the leading Russian pharmaceutical retailer announces 1H 2012 financial results prepared in accordance with the International Financial Reporting Standards (unaudited).

SALES:

Consolidated sales from ongoing operations in 1H 2012 increased by 2% versus 1H 2011 and reached RUR 11 015 mln;

Net sales in the retail pharmacy segment increased by 3% and reached RUR 7 448 mln. As of the end of 1H 2012 Pharmacy Chain 36.6 operated 935 pharmacies, 9 stand-alone optical outlets and 24 additional optical departments within pharmacies;

During 1H 2012 37 stores were opened organically and 107 stores were closed, 194 stores were converted to the new format ‘Leko’;

PROFIT:

Consolidated gross profit in 1H 2012 reached RUR 4 670 mln, which is a decrease of 3%;

Gross profit of the retail pharmacy segment in 1H 2012 reached RUR 2 205 mln, which is a decrease of 7%. The gross profit margin in the retail segment in 1H 2012 decreased as a percentage of sales by 3 points to 30%;

The Company’s consolidated EBITDA reached RUR 932 mln, which is a decrease of 7%; Company’s consolidated EBITDA margin decreased by 1 point;

EBITDA loss in the retail pharmacy segment in 1H 2012 reached RUR 149 mln versus profit of RUR 13mln in 1H 2011;

Consolidated selling, general and administrative expenses decreased in 1H 2012 by 2% and reached RUR 3 945 mln;

SG&A of the retail pharmacy segment in 1H 2012 decreased by 1% and reached RUR 2 486 mln.

Consolidated Net loss reached RUR 333mln versus RUR 306 mln in 1H 2011.

FINANCIAL DEBT AND INVESTMENTS

Company’s Net Debt (deducting the remaining monetary funds) equaled to RUR 8 757 mln;

As of the end of 1H 2012 consolidated financial debt reached RUR 9 898 mln which is a slight increase of 4% versus the beginning of the year data. Whereas the retail pharmacy financial debt equaled to RUR 8 270 mln and Veropharm’s debt reached RUR 1 631 mln;

Consolidated finance costs in 1H 2012 increased by 12% and reached RUR 788 mln;

Consolidated investments in fixed and intangible assets in 1H 2012 reached RUR 388 mln, out of which retail investments in opening new pharmacies and re-branding equaled to RUR 89 mln Veropharm investments reached RUR 297 mln.

VEROPHARM

For the latest update on 1H 2012 performance please refer to the official press-release of the company as of August 29th, 2012 at www.pahrmacychain366.ru.

ELC

Early Learning Center revenue consolidated by the Group (which is 50% of the total revenue) in 1H 2012 increased by 5% and reached RUR 119 mln;

Net loss in 1H 2012 equaled to RUR 1,72 mln;

As of the end of 1H 2012, the unit operated 19 stores.

Company comments:

In 1H 2012 the company, in general, managed to achieve its objectives for the period. The company increases the retail segment sales, despite the fact that more than 100 pharmacies were closed during the period. Changes in the pricing policy of pharmacies Leko pushed down the retail gross margin but this helped to reverse the negative trend in customer traffic. By the end of six months the consumer traffic growth in pharmacies LEKO has reached 16%.

Expected negative impact on gross margin was partially offset by stepping up sales of Private Label goods: the half-year sales of private label increased by more than 50%.