API posts $114.9m loss
May 1, 2014
AUSTRALIAN Pharmaceutical
Industries Ltd (API) has posted a
statutory loss of $114.9m in its
half year results (PD breaking news
yesterday).
This follows an impairment charge
of $131m, signalled in mid-April
(PD 17 Apr).
The company said its underlying
net profit after tax was up 29%
year on year to $16.2m, on gross
revenue of $1.67b, up 4.6% year
on year.
Priceline Pharmacy reported
overall sales growth of 11.5%
and gross profit up by $6.2m to
$101.3m, with 10 more stores.
The company expected to roll out
20 stores per year, with another 10
stores added this financial year.
Its pharmacy division had
underlying sales growth of 8%,
excluding Pharmaceutical Benefits
Scheme reforms, on revenue of
$1.17b, up 2% year on year.
The New Zealand segment had a
$767,000 loss for earnings before
income and taxes (EBIT), with sales
flat due to the strong New Zealand
dollar and declines in Australian
contract volumes, API said.
It was set to improve, with a focus
on delivering more private label
categories and would be profitable
in the second half of the year, the
company said.
API said the government was late
in paying its February Community
Service Obligation (CSO) payment
of $6m, which came in early March
and was “never usually late,” API
chief financial officer Graeme Fallet
said.
Of the total impairment charge,
$52m related to pharmacy loans,
for which a heads up agreement
was signed in October to extend
the loans for a further five years
but an agreement on a final
documentation form has not been
reached.
These negotiations and the need
for some customers to renew their
bank finance facilities meant the
carrying value of the loans had
been determined on the basis that
they were due now, API said.
Financial guarantees of $25.3m
which had previously been
reported as contingent liabilities
had been recognised as a liability at
the reporting dates, API said.
The remaining $27m was what
API expected to be repaid by the
customers over the next five years,
API said.
A bullet payment of $62m was
expected, meaning API would
recover its loan, Fallet said.
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