Antibiotice looking for balance

After one year of soaring profits, drugmaker Antibiotice Iasi is preparing a different strategy, with financial balance as this year’s top priority, instead of sales and profit. Moreover, the management is planning to use last year’s profit for investments, should shareholders agree.
“We had sales worth about 33.27 million dollars (1,100bn ROL) last year and the growth target for 2003 does not exceed 5%. On the other hand, we shall focus more on recovering receivables and paying our debts,” Ioan Nani, chairman of Antibiotice Iasi, told Ziarul Financiar.
The company holds about 4.5% of the Romanian drug market and last year had trouble collecting its money from the hospitals and pharmacies. At the beginning of Q4, 2002, Antibiotice logged receivables worth 490.02 billion ROL ($14.6m), accounting for 63.3% of the nine-month turnover. Profit posted in the first three quarters of 2002 amounted to three million dollars, more than double the level recorded in the same period of 2001.
Last year’s sales were 5% bigger in dollars as compared to 2001.
“We do not have the final figures for last year’s profit yet, but we are planning to convince our shareholders to fully reinvest earnings, instead of granting dividends. In fact, the significant profit increase in 2003 was precisely due to the past years’ investment programme, which we aim to continue,” the Antibiotice manager said.
Investments will be channeled to the production capacity and to injectable drugs, especially cephalosporin, which accounts for an annual market of several tens of millions of dollars. Given the ascending trend posted by this segment, Slovenian company Lek last year decided to start building a new plant in TA„srgu-Mures, especially for making oral cephalosporin.