Erste: A&D Pharma's EBITDA margin could be lower than targeted

The EBITDA margin registered by the Romanian pharmaceutical company A&D Pharma could stand at 8.1% this year, against an initial target of 8.6%, according to Erste Bank analysts. “Given the overhead costs generated primarily by the company’s international expansion plans, we have reduced our estimates on the EBITDA margin to 8.1%,” reads an Erste report. The profitability of the overall pharmaceutical industry has been significantly affected by the constant decline of drug prices over the past few years, by the cuts in the markups imposed by the Ministry of Health and implicitly by increased competition. For Mediplus, the distribution division of A&D Pharma, analysts forecast the EBITDA margin will settle below 10%, while for Sensiblu, the retail division, a positive margin of 0.2%, is anticipated in 2007. Erste has maintained its sales estimates, at 440.1 million euros in 2007, and slightly increased its estimates for 2008, to 564.3 million euros, up from 557.5 million euros. At present, A&D Pharma is the largest player on the Romanian market.