Abbott Pakistan - the glory continues

Abbott Pakistan has managed to stay in good shape. Undeterred by the intricate conditions hurting the growth of pharmaceutical industry, Abbotts profitability keeps on getting bigger and better.
CY14 was no exception as firms bottom line during the year flaunted a decent rise of 11 percent year-on-year. Mind you, this is nearly half of the growth rates achieved by the company during 2009-2013. Yet, given the price freezes on drugs, Abbotts profitability growth during the year is no mean achievement!
Top line stayed strong, rising by double-digits in CY14 but this has been the norm for the company. This is clearly the outcome of Abbotts diversified portfolio mix. Taking clue from September 2014 financials, pharmaceutical segment contributed 74 percent to the sales revenue of the company, followed by nutrition business (16 percent) and others (9 percent). Although pharmaceutical segment continues to dominate the portfolio, its dependence is relatively lower in Abbotts product portfolio when compared to the industry average (above 80 percent).
The growth in top line is likely to have come from volumetric rise in pharmaceutical segment and healthy revenue generation from the consumer healthcare business. Others segment which includes general health care, diagnostic and diabetes care has been under pressure for some time owing to regression in Mospel sales. With the outbreak of dengue fever staying under control, the trend is unlikely to change the momentum anytime soon.
Thanks to the favourable product mix, gross margin stayed intact. On the other hand, net margin inched down a tad led by rise in selling and distribution expenses. Here, the surge in expenses is linked with the growth in volumetric sales.
Moreover, the result was accompanied with a final dividend of Rs4.8 per share, which is in addition to 30 percent (Rs3 per share) interim dividend already disbursed by the company.

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Abbott Pakistan Limited - Financial Highlights

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Rs (mn)                             CY14      CY13     chg

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Sales                              19692     17217     14%

Cost of goods sold               (12142)   (10595)     15%

Gross profit                        7550      6622     14%

Selling & distribution expenses   (2965)    (2471)     20%

Administrative expenses            (369)     (367)      1%

Other operating income               476       273     74%

Other operating charges            (369)     (367)      1%

Operating profit                    4323      3690     17%

Profit after tax                    2816      2530     11%

EPS (Rs)                           28.77     25.83     11%

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