Drug producer Antibiotice Iasi reported a 14% slump in its Q1 profit in real terms, from 1.15 million dollars (37.22bn ROL) in 2002 to 0.98 million dollars. The decline in profit occurred amid higher sales, from 7.56 million dollars in the first quarter of 2002 to 7.8 million dollars. Against inflation, however, (Antibiotice sells most of its products on the domestic market), the company's sales dropped. Turnover in the first quarter was only 7% higher in ROL, a pace that was quite inferior to the inflation registered during the March 2002-March 2003 period, 17.1%. The Q1 sales account for 20.88% of the company's total turnover budgeted for 2003, and profit -21.77%. Antibiotice Iasi set a 1,250 billion ROL turnover target for this year, while profit should reach 175 billion ROL. It is therefore estimating a rise of about 5% in sales and earnings in real terms. The company wants to attain moderate growth this year so as to focus on its cash flow, which was seriously affected last year by the difficult financial situation of the health care system. Nevertheless, after the first three months of the year, the value of receivables was on the rise, from 616.04 billion ROL, at the end of Q1, 2002, to 645.94 billion ROL. In fact, the sums Antibiotice will have to cash in from pharmacies and hospitals are at least twice higher than its turnover in the first three months of the year. Because of the difficult situation of its cash flow, Antibiotice currently finds itself in a paradoxical situation. Thus, it has to pay penalties for the unpaid taxes to the Finance Ministry, while it is short of cash precisely because the ministry does not honour its payment obligations. ZF
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