Stability in turbulent times Q4 2022

Q4 2022 results

2 March 2023

  • The Group’s sales revenue increased by BGN 60.0m or 3.7%, reaching BGN 1.68 Bn by the end of Q4 compared to BGN 1.62 Bn for the same period last year. Sales of goods, which are distributed through Sopharma Trading, increased by BGN 50.8m or 3.8%, reaching BGN 1.38 Bn compared to BGN 1.33 Bn last year. Sales of finished products, which are own production, increased by BGN 8.9 m BGN or 3.2%, to BGN 283.9m for 2022 compared to BGN 274.9 million last year.
  • Тhe growth in sales in Bulgaria of self-manufactured products, compared to the previous period, is 4%. Sopharma maintained its market share and occupied 2.48% of the total volume of the Bulgarian pharmaceutical market in terms of sales value and 9.46% in terms of items
  • Self-manufactured products marked sizeable increases in the export markets as well. The growth was highest in markets like Mongolia (113%), Serbia (73%), Moldova (61%) and Georgia (61%), while those in Russia grew at a more moderate pace with 11%. Decreases were recorded in Poland by 5%, Ukraine by 7% and Vietnam by 13%.
  • EBIT decreased by BGN 27.6m to BGN 70.5m, or down 28.1% from Q4 2021.
  • Net profit decreased by BGN 18.9m or a drop of 20.6% to BGN 72.6m. The most significant contribution to its reduction was the profit registered in the previous reporting period from the disposal of subsidiaries in Latvia and Belarus in the amount of BGN 36.1m, as well as the depreciation of non-current assets charged in 2022 in the amount of BGN 20.8m. In addition to the effect of operational activity, a more significant positive impact is exerted by the increase in the current period of profits from associate companies in the amount of BGN 10.4m.
  • Two of the subsidiaries in the Group, a pharmaceutical production company and a distributor company, are based in Ukraine. At the date of preparation of the financial statements, the assets of these subsidiaries were not physically affected by war.
  • Аs of 31.12.2022 the buy-back shares of Sopharma was 13 479 188 or 10% of the issued shares.

Atanas Videv
Equity Analyst
Tel.: +359 88 834 3583
e-mail: videv@sis.bg

Svetozar Abrashev
Senior Managing Partner
Tel.: +359 2 937 9869
e-mail: abrashev@sis.bg

Sofia International Securities
Sofia 1000,
140 G. S. Rakovski Str.
Tel.: + 359 2 937 98 65
e-mail: info@sis.bg

The report can be downloaded in a pdf format here.

The review for Q1 2024 can be found here.

The review for Q2 2023 can be found here.

The review for Q1 2023 can be found here.

To the Sopharma analyses page.

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Disclaimers and Required Disclosures

Sofia International Securities AD is a member of Bulgarian Stock Exchange (BSE) and the Central Depository of Bulgaria. The company provides brokerage, investment banking, equity research, portfolio management and other services. Sofia International Securities AD is regulated by the Financial Supervision Commission of Bulgaria.

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Financial Interest
Sofia International Securities may or may not own shares of the company that is subject of this document. The individuals who are responsible for the preparation of this report may or may not own shares of the company that is subject of the report. Sofia International Securities is not a market maker in the securities that are subject of this document. In the past, Sofia International Securities might have provided corporate services to the company that is subject of this presentation and may seek to provide such and other services in the future. As of the date of this document Sofia International Services provides brokerage services to the company subject of this document.

Equity Valuation and Risks
The value estimate(s) stated in this report is (are) valid only in light of the valuation methods used to derive this estimation. The use of other or more comprehensive approaches could result in other estimates of value that could diverge substantially from the results presented herein. With regard to the above, when making our conclusions about the intrinsic value of the Company’s share capital, we have not considered or evaluated any possible tax, legal or other effects that might arise from engaging in transaction(s) with the shares of the company. The document should not be regarded by recipients as a substitute for the exercise of their own independent judgment and they should seek and obtain independent investment advice is necessary. Any facts and/or information stated in this document are subject to change without notice and Sofia International Securities is not under any obligation to update or keep current the information contained herein. Any opinions expressed herein are only correct as of the stated date. Past performance is not indicative of future results. Foreign currency rates of exchange may adversely affect the value, price or income of any security.

General
The report is prepared solely for informational purposes and is not to be construed as a solicitation, recommendation, investment advice or an offer to buy or sell any securities or related financial instruments. The securities described herein may not be eligible for sale in all jurisdictions or to certain categories of investors. The document is based on information obtained from sources believed to be reliable but Sofia International Securities do not warrant its accuracy, nor that it is a complete summary of the securities, markets or developments referred to in the report. This report does not intend to provide assurance on the value of the company’s shares or on the achievability of the projections, statements and assumptions used by us. Actual results achieved in future periods might differ substantially from the projected ones because events and circumstances frequently do not occur as expected. Sofia International Securities accepts no liability whatsoever for any loss or damage of any kind arising out of the use of all or any part of this report. Additional information will be made available upon request.