Sopharma Q2 2025 consolidated review – Exports to Serbia, Russia and Ukraine drive sales to new heights

Q1 2025 Consolidated Results

• Revenues from sales of manufactured medical products increased by BGN 273.2mln to BGN 1,272m, compared to BGN 998.9m in Q2 2024 or 27.4% increase. The main push came from sales of products, for which the approval for distribution came in late 2024.
• Sales growth for Q2’25 in the domestic market marked 2.9%. As per data from IQVIA, Sopharma has the 17^th largest share in the Bulgarian market responsible for 1.75% of the supply in nominal terms, while it holds the 2^nd largest share with 6.23% with regards to volume (amount of meds). Note that while sales of Sopharma grew, the relative share declined slightly from last year, indicating that the market as a whole grew even more, which is a definite positive sign indicating a significant upside potential.
• The positions of the main competitors are as follow: Merck – 5.84% (0.13% vol), AstraZeneca – 5.34% (0.59% vol), Roche – 4.88% (0.31% vol), Swixx Biopharma – 4.34% (1.43% vol), Novartis – 4.17% (1.15% vol), Abbvie – 3.96% (0.09% vol), Pfizer – 3.75% (0.74% vol), Johnson & Johnson – 3.08% (0.71% vol), Teva – 2.79% (7.93% vol), Stada – 2.69% (4.40% vol),. The highest sold products are Analgin, Vicetin, Famotidine, vitamin C, Paracetamol, Methylprednisolone.
• Internationally, growth was recorded in Russia (27.6%) and Ukraine (10.5%). International sales have been the biggest growth engine for the company over the last year. It is clear that the company is returning to these traditionally important markets, which recorded declines in the last couple of years because of the conflict there and the associated sanctions and interrupted supply chains.
• EBITDA increased significantly by 36.5% to BGN 106.1mln and Net Profit shot up by 55.7% to BGN 76mln.
• OPEX increased 24.7%. In that, COGS had the largest contribution increasing by BGN 192.7mln or 25.7%. Personnel expense added BGN 31.7mln or 32.5% and is the result of salaries indexation and increase in workforce. External services added BGN 10mln to reach BGN 60mln and it is the result of distribution costs.
• Trade receivables increased significantly by 44% to BGN 452mln and the majority of that gain appeared in both Q1 and Q2 (the account was BGN 411mln by Q1 2025). The company does not disclose which part of that is due to sales to hospitals vs retailers, but it notes that receivables from hospitals can be extended significantly beyond the 30/60/90 day framework due to “the specifics of the counterparties” and can reach up to 2 years. State funded hospitals are heavily dependent on state budget approvals and allocations from the Ministry of Healthcare, which tend to get interrupted during turbulent political periods. Considering the fact that nearly half of the sales of Sopharma are domestic, it is safe to assume that a large part of that is to hospitals, which experience delays in budget allocations. As such, the negative side is that those payments get delayed, but the positive is that the collection rate is either 100% or very close to it. As a result, we expect outsized gains in revenues from domestic sales in the following quarters.
• Total debt marked a massive increase of 74% to BGN 603mln, adding BGN 257mln. In that LT debt, specifically debt to banks, added BGN 130mln to reach BGN 226.7.5mln. Sopharma specifies that the purpose of it is the acquisition of long term assets, which will serve the expansion of the production of the company and that it is in line with debt covenants, such as Current Ratio of 1.1, net debt not exceeding 4x EBITDA, capital adequacy greater or equal than 40% and not decreasing own capital after last audited financials. The major withdrawals came from credit lines with limits of EUR 40mln, BGN 30mln, EUR 20mln, EUR 3.5mln and EUR 4.7mln. Currently, everything is within required limits.
• Sopharma showed excellent performance considering the heavy dependency on the Russian market, which was clearly affected from the war with Ukraine (trade limitations, etc). In the same time, they managed to expand in Serbia and the outcome from the positioning will be seen in the following quarters. The growing sales in Russia and Ukraine confirm that it is returning to its important export markets. It is a company with strategic view and good financial management.

Full review can be accessed here.