Sicomed sees bigger profits, receivables

The upward trend posted by drugmaker Sicomed Bucharest in the first quarter of 2003 has continued throughout April-June. High receivables, though, which almost equal turnover, remain the company’s main problem. sleradendt

Sicomed, the fourth-largest player on the Romanian drug market, in the first half posted sales worth 23.18 million dollars, up 30% since the year-ago period, with net profit standing at 3.52 million dollars, 73% higher.

The sales and profit growth pace is similar to the trend posted in the first three months of the year.

Sicomed is thus well positioned to hit the targets it set early this year. The respective goals were initially deemed as too optimistic, considering the company had just overcome two years of declines (2001 and 2002).

“The increase was mainly due to the implementation of a better sales strategy, both for the products and for the customers portfolio. At the same time, marketing campaigns have improved the image of Sicomed products,” stated Mirel Nicola, Sicomed’s marketing and sales manager.

Sicomed shares, which are listed on the Bucharest Stock Exchange, yesterday climbed 3.64% to 2,850 ROL in the wake of the company’s financial announcement. The stock’s value has been going up since this spring, when first-quarter results prompted a 40% increase, from April’s 2000 ROL/share price.

Company officials say the improvement in financial results also occurred amid tighter cost control, as well as a change in the company’s management strategy.

“The positive results Sicomed registered in Q1 were also due to the implementation of a cost control strategy in the wake of management changes, as well as to the introduction of the ERP (enterprise resource planning) system,” states Klaas Postema, general manager of Sicomed.

According to Postema, the company sticks to its early-year forecasts. “Considering the positive evolution of the first-half turnover and following the launch of some new products on the market, we will maintain the projections pointing to turnover worth about 48 million dollars,” stared Sicomed’s top manager.

However, the increase in sales has also had some negative effects for Sicomed. The company’s sales are mainly directed to hospitals because of the company’s specific products. Thus, the company is considerably affected by the healthcare system crisis.

Therefore, the growth pace of the company’s receivables matched the increase in sales, from 591.86 billion ROL, at the end of H1, 2002, to 757.62 billion ROL. The company’s liquidity amounted to 31.8 billion ROL in H1, 2003. Because of its cash flow situation, Sicomed also needed the State’s guarantees for an eight million-dollar loan. laurentiu.ispir@zf.ro