PGF makes stable increase in profitability
During the first six months 2006, the Polish Pharmaceutical Group confirmed its leading position at the local pharmaceuticals distribution market. Its record revenues were accompanied by profitability improvement, while the high positive operating cash flows, reaching as much as PLN 45 million, facilitated a further debt reduction. In the first half 2006, the company’s debt level decreased by PLN 27.8 million, which in turn resulted in a decreased ratio of net debt to shareholders’ capital at the level of 1.22 – “Our primary goal is to constantly increase the company’s value. At the difficult market with extremely low price margins a stable revenue increase is the best proof that we were right in adopting our development strategy” – said Mr. Jacek Szwajcowski, PGF President. “The PGF is not only the leading, Poland-wide pharmaceutical wholesale, but it is, above all, a company that manages Poland’s greatest and one of the biggest European programmes that brings together pharmacies operating under one brand of “APTEKI Dbam o Zdrowie”. I am convinced that this model of pharmaceuticals’ distribution, based on a close co-operation between a public pharmaceuticals distributor and private, family-owned pharmacies will prove to be the best system for the Polish patient” – Mr. Szwajcowski added.
Financial results of the Polish Pharmaceutical Group
| I-II Q 2005 | I-II Q 2006 | change | |
|---|---|---|---|
| EBITDA (PLN) | 41 476 | 50 933 | +22,8% |
| EBITDA margin(%) | 2,12 | 2,53 | +0,41 p.p. |
| Operational profit (PLN) | 33 312 | 40 097 | +20,4% |
| Operational profitability (%) | 1,7 | 2,0 | +0,30 p.p. |
| Net profit (PLN) | 25 256 | 28 006 | +10,9% |
| Net profitability (%) | 1,29 | 1,39 | +0,10 p.p. |
In the second quarter 2006, with the Shareholders General Assembly’s approval of the 2005 results, the PGF concluded the execution of a three-year motivation programme for the company’s managers. In the course of the programme, the company’s consolidated net profit has increased by almost 115% (from PLN 24.5 million in 2002 to PLN 52.6 million in 2005) – “The results we have achieved indicate that the programme approved by the Shareholders has achieved its goals”– Mr. Szwajcowski stated.
Following the success of the completed programme, the PGF’s General Assembly adopted a resolution to initiate a new programme aimed at basing the management’s remuneration on the results achieved in the years 2006-2009. In the framework of the programme, maximum 496,000 new shares will be issued (up to 124,000 shares annually) to be distributed on condition there is a net profit increase (75% of yearly tranche) and that the rate of return of PGF shares is higher than the WIG index change that year (25% of yearly tranche).
