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Press Release

Reviewed Financial Statement's announcement for the period 30 June 2017

EastPharma Ltd
Posted on: 10 Aug 17

EASTPHARMA LTD.

London, 10 August 2017 - EastPharma (EAST LI)  announces that it is releasing its reviewed financial statements for the period 30 June 2017.

Management comment on the financial performance of EastPharma is provided in the attachment, and a presentation of the results will be available on the EastPharma website www.eastpharma.com on 11 August 2017.

A conference call to review the H1 2017 financial performance will be hosted by the management of EastPharma at 11:00am London time on 11 August 2017 (06:00am New York time / 12:00-noon Zurich time / 01:00pm Istanbul time). The dial-in details are provided below.

Conference call:

Dial-in Number (UK): + 44 (0)20 7162 9960
Dial-in Number (US): + 1 646 851 2094
Dial-in Number (Switzerland): + 41 (0)434 5692 65
Dial-in Number (Germany): + 49 (0)307 2616 7227

Conference ID:  962582

For further information, please contact:

Investor Relations:
email: ir@eastpharma.com

MANAGEMENT COMMENTS ON EASTPHARMA's FINANCIAL PERFORMANCE IN 6M 2017 (IFRS):

According to IFRS results, revenue in H1 2017 was USD 113.8mn, down 8.5% from the same period in 2016 (USD 124.3mn). ) In Turkish Lira terms, revenue increased by 14.0% in the same period (Net sales in H1 2017 were TRY 413.6mn vs TRY 362.7mn net sales in H1 2016).

The average US Dollar exchange rate strengthened by 24.6% against the Turkish Lira to 3.6356 in H1 2017, which compares with an average rate of 2.9181 in H1 2016. The USD/TRY exchange rate was 3.5071 on 30 June 2017, while it was 3.5192 on 31 December 2016, which corresponds to a decrease of 0.3%.

EastPharma's sales decrease in US dollar terms was mainly due to depreciation of Turkish Lira against hard currencies. In H1 2017 versus H1 2016, Human Pharma revenues in US dollar terms decreased by 9.0% (from USD 115.1mn to USD 104.7mn). In TRY terms, increased by 13.1% (from TRY 336.6mn to TRY 380.7mn). Veterinary products revenues in US dollar terms increased by 3.2% (from USD 7.16mn to USD 7.39mn). In TRY terms, increased by 28.6% (from TRY 20.91mn to TRY 26.88mn).

Deva's Capital Markets Board (CMB) results show revenue in H1 2017 was TRY 419.1mn, up 13.2% from the same period in 2016 (TRY 370.2mn).

Deva's sales increase was mainly achieved by both increased volumes at human pharma businesses and price increase which was effective as of 20 February 2017. In H1 2017 versus H1 2016, Human Pharma revenue increased by 12.5% (from TRY 343.4mn to TRY 386.2mn).Veterinary business revenue increased by 28.6% compared to the H1 2016 (from TRY 20.91mn to TRY 26.88mn).

EastPharma's gross profit in H1 2017 was USD 54.9mn, down from USD 59.4mn in H1 2016. The gross profit margin in H1 2017 was 48% vs 48% in H1 2016.

EBITDA in H1 2017 was USD 27.6mn vs USD 34.1mn in H1 2016 representing an EBITDA margin of 24.3% vs 27.5% in H1 2016.

Operating expenses in H1 2017 decreased by 3.1%, from USD 32.9mn to USD 31.9mn. The ratio of operating expenses to revenues increased to 28.0% from 26.5% compared to H1 2016. Sales and marketing expenses in H1 2017 were 13.5% of revenues; general administrative expenses were 10.5% of revenues; research and development expenses were 4.0% of revenues. These expenses were 13.6%, 10.0% and 2.9% in H1 2016, respectively.

Finance cost decreased by USD 2.44mn, from USD 18.06mn to USD 15.62mn in H1 2017 compared to H1 2016. Foreign exchange losses on borrowings and loss on derivatives increased by USD 0.72mn, bank loan and bond issued interests decreased by USD 1.55mn, amortization of discount on receivables decreased by USD 1.64mn and other interest expenses increased by USD 0.03mn. Average TRY interest rate decreased to 11.8% in H1 2017 from 12.9% in H1 2016.

Receivable days at 30 June 2017 were 102 days, compared to 109 days as at 31 December 2016.

Philipp Haas, EastPharma's Chairman and CEO, stated;

'In the first half of 2017, the environment was extremely adverse.  Even though we were able to increase sales significantly in terms of units and also in Turkish Lira terms, the strong devaluation of the Turkish Lira brought sales in USD terms into negative territory. The devaluation also affected our margins negatively. Key product sales were hit by more restrictive regulations, introduced by the Turkish Ministry of Health. In the Turkish market, competition has strongly increased and we have seen generic product approvals for some of our key products during the period, which will certainly have a negative impact on our sales and profitability in the future. On the finance side, the weak Turkish Lira has brought about a strong increase in interest rates, increasing the cost of our debt servicing.'     

EastPharma Ltd - a company active in the manufacturing and marketing of pharmaceutical products in Turkey and in other regional markets; for further information please visit
www.eastpharma.com

H1 2017 Results of EastPharma Ltd
EastPharma Consolidated Financial Statements 30 June 2017


This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.

The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.

Source: EastPharma Ltd via GlobeNewswire
HUG#2126746
GlobeNewswire
globenewswire.com

Last updated on: 11/08/2017

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