Land accounts for one quarter of Sicomed's value

The 40 hectares of land owned by pharmaceuticals producer Sicomed Bucharest but not used for production activities are now worth some 20-30 million dollars (15-22 million euros), according to research by Raiffeisen Centrobank Austria.

Raiffeisen analysts put the total value of the company, including land and its pharmaceuticals business, at 102 million dollars (77 million euros), 7% higher than the company’s current capitalisation on Bucharest Stock Exchange. Against its current price, Raiffeisen has granted the company’s stock a “neutral” rating, indicating a weak outlook as to the possibility of a medium-term surge in the stock price.

Since the beginning of the year, Sicomed stock climbed 83% on the stock exchange to the price of 6,700 ROL/share seen on Monday.

In total, Sicomed owns 50 hectares of land in the south-eastern area of the capital, though production activities only take place on a ten-hectare plot. The 40 hectares not used by the company will be sold or turned into an industrial park. The price of land in this area has risen significantly in recent years on the back of the solid economic growth prospects of the area, which is close to the Bucharest-Constanta highway.

As a result, industrial parks were one of the investments made by the Romanian Post Privatisation Fund (RPPF), one of the main stakeholders in Sicomed.

Sicomed is one of the major players on the Romanian pharmaceuticals market. According to Cegedim Romania, a market research firm, in the year to June 2004, the company enjoyed a 4.9% market share, ranking fifth it in terms of sales value.

The company is aiming for a turnover of 48.5 million euros in 2005, 20% higher than the level forecast for this year, and it also intends to increase exports. In the first nine months of the year, the company reported net profits of 4 million euros, 20% lower than in the corresponding period of last year. A stake of 58.4% of Sicomed stock is held in equal shares through an investment vehicle, Venoma Holdings, by the investment funds Black Sea Fund and RPPF. SIF Muntenia owns 12% of the company’s stock, while SIF Oltenia has 9.99%. vlad.nicolaescu@zf.ro