“The financial statements of 2011 are not done yet. Farmaceutica Remedia will surely end 2011 with slightly more than EUR50 million in turnover, though,” said Robert Peloiu, the general manager of the company.
Farmaceutica Remedia set out to make more than 5 million lei (EUR1.15 million) in net profit this year. It posted almost RON4.1 million in net profit in the first nine months of 2011, up 39% compared with the same interval in 2010, according to data from the Bucharest Stock Exchange, where the company is listed.
Robert Peloiu says the investment budget will amount to more than RON2.5 million this year and will be directed both to existing pharmacies and to buying new ones, unless the law changes so as to liberalize opening of pharmacies.
As the law says, the most important criterion that has to be taken into account when opening a retail pharmacy is demographics, so that the maximum number of such stores is set by the law and has already been reached. Which is why no chain can expand unless it buys rivals. Independent pharmacies are already up for sale driven by the cash flow problems caused by the delayed reimbursement of bills by the government, by as much as 300 days.
Remedia derives 60% of its revenue from distribution, which is done via its eight logistics centers in Bucharest, Deva, Timisoara, Brasov, Craiova, Iasi, Pitesti and Targu-Mures, according to the data in 2011 nine-month report. About 40% comes from the sales of the Remedia pharmacy chain.
The company’s general manager says Farmaceutica Remedia owns 60 pharmacies directly or indirectly, as seven of them are held by other companies where it owns at least 95%.
Robert Peloiu says the market will grow in 2012 by no more than 10%. The challenges of the year will be the reduction of margins, the increase in the period of time the government takes to pay its debt and the risk of independent pharmacies going bankrupt and thus making it less likely for drug distributors to get paid.
(English version by Loredana Fratila-Cristescu)