KARO PHARMA TRIPLES SALES AND PROFIT IN THE SECOND QUARTER
INTERIM REPORT JANUARY – JUNE 2018
THE PERIOD AND THE SECOND QUARTER
· Net sales amounted to MSEK 756.5 (281.8), of which the second quarterly MSEK 489.4 (142.5). This corresponds to an increase of 168.5%, and for the second quarter of 243.5%. Growth was driven mainly by acquisitions.
· Organic growth during the period amounted to + 7.7%, and to + 4.3% in the second quarter. During the period, pharmaceuticals accounted for + 9.3% and other products for + 6.5%.
· EBITDA amounted to MSEK 321.0 (93.5), of which the second quarter amounted to MSEK 232.3 (49.7), corresponding to a margin of 42.4% (33.2%) for the half-year and 47.5% (34.9%) for the second quarter.
· EBITDA increased by 243.4% during the period compared with the previous year.
· Gross margin amounted to 60.8% (56.8%), in the second quarter to 63.1% (59.9%).
· Cash flow from operating activities amounted to MSEK 136.7 (78.5), of which the second quarter amounted to MSEK 95.2 (43.6)
· Earnings per share was SEK 5.07 (0.37), of which the second quarter SEK 3.86 (0.16)
· Cash and cash equivalents at the end of the period amounted to MSEK 333.6 (150.2)
· The rights issue to finance the LEO acquisition was subscribed to 121.8%. The issue was carried out in the second quarter and raised MSEK 1,314.7 before transaction costs.
· Karo Pharma completed the acquisition of the operations of LEO from the Danish pharmaceutical company LEO Pharma A/S for MEUR 260 with access as of April 4, 2018.
· Karo Pharma received two milestone payments from Pfizer in the second quarter totaling MUSD 10.
· The acquisition of the LEO operations will result in future tax profits in the company, which contributed to the recognition of deferred tax assets during the period of MSEK 417.7.
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COMMENTS BY THE EXECUTIVE CHAIRMAN
We are presenting yet another very strong quarter for Ka-ro Pharma. Sales and operating income tripled in comparison with the second quarter last year.
The quarter was positively impacted by the fact that ac-quired products from LEO were included for the first time.
As a result of the LEO acquisition completed during the quarter, we can now report a significant tax revenue by recognizing a value in the balance sheet of our old tax losses.
Expected future profits implies that we can now utilize our tax losses for a number of years to come, which will have a major positive impact on our cash flow.
Moreover, during the second quarter we received addi-tional milestones for the ROR-gamma project. This has had a total impact on earnings in the second quarter of MUSD 10.
The repurchase of own shares to be used in incentive programs for senior executives in the company has begun during the second quarter.
An operational consolidation of the company is next on our agenda with possible additional acquisitions.
We have now come a long way in our plan to build a leading specialty pharma company in the Nordic region. The next step will be to establish operations outside the Nordic region in a controlled and profitable manner. In the future, the organization will have a stronger focus on drugs in relation to other health products. The develop-ment of the company looks very strong.
FOR FURTHER INFORMATION, PLEASE CONTACT
Peter Blom, CEO, +46 70 655 56 98 or email@example.com
ABOUT KARO PHARMA
Karo Pharma is a specialty pharma company that develops and markets products to pharmacies and directly to healthcare providers. The share is listed on Nasdaq Stockholm in the Mid Cap segment.
The information in this report is such that Karo Pharma is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out above, on July 19, 2018 at 8.00 a.m. CET.