Last quarter hurts Sicomed profit

Sicomed Bucharest, the largest Romanian drugmaker, managed to close last year with 25% sales growth, but the last quarter had a negative impact upon profit.

The company reported preliminary sales worth $47 million (1,571.27 billion ROL) in 2003, up 25% from 2002.

However, the final profit in 2003 did not soar, as the analysts had expected following the performances in the first nine months, when the company posted double profit.

Consequently, Sicomed logged profit worth 153.41 billion ROL ($4.5 million), up more than 10% from 2002, but lower than the result reported in the first three quarters of 2003 (187.68 billion ROL).

“Profit went down because of the temporary drop in the production capacity in November-December period, and because of a 25bn ROL tax debt acknowledged in December. The result also decreased because of the provisions prompted by the significant receivables and the replacement of all the raw materials that were no longer used in the technological process,” said Klaas Postema, general manager of Sicomed.

The drugmaker’s production capacity decreased in the first three quarters of 2003 because two units of the company had to be prepared for the Good Manufacturing Practice certificate, a standard imposed to all Romanian companies as of January 1, 2004.

The tax debt included in last December’s accounts chiefly stands for interests and delay penalties for the payment of VAT and profit tax in the last three years, as the company found it difficult to get its money back from the healthcare system. Since Sicomed sells the bulk of its output to hospitals (due to its portfolio inherited after the Romanian drug industry’s restructuring), the healthcare crisis has dealt it a severe blow.
laurentiu.ispir@zf.ro