Farmexim drug distributor, with annual turnover worth 150 million euros, says it registered losses of 5.5m euros in the wake of RON depreciation, a process that started at the middle of last year.
"The recalculation of foreign currency debts to third parties the company registered in late 2007 brought us financial losses of around 3.5m euros. On the other hand, the Health Ministry's refusal to observe legislation on the adjustment of drug prices to RON exchange rate has already brought us losses estimated at about 2 million euros," said Ovidiu Buluc, the company's general manager.
Farmexim last year contracted a loan worth 25.3m euros from BRD-SocGen, according to Official Gazette data. Most distributors have been hit at the level of lines of credit.
"The impact of RON decline has been clearly felt by all drug distributors, with this year's profitability being clearly endangered for all market players. Moreover, operating costs have been going up on rising fuel and utilities prices," added Buluc.
Farmexim ended 2007 with turnover worth 496m RON (148.6 million euros) and income standing at 5.8 million RON (1.7m euros), which put the company among the top players on the market.
In the first three months of this year, the distributor reported a 60% turnover increase to 163.5m RON (44.3m euros).
"The increase was made possible by the natural expansion of the market of pharmaceutical and para-pharmaceutical products amid the raised health budgets, but also by the population's rising purchasing power. On the other hand, the transfer of the release of drugs included in national programmes to drug stores outside hospitals also had a positive impact," specified Buluc.
"By creating a separate unit dealing with the promotion and sale of OTC drugs and dermocosmetics in 2007, we managed to expand our portfolio in co-operation with new partners. The weight of these products in Farmexim's portfolio and turnover doubled in 2007 against 2006 and we expect at least similar growth in 2008. In the first quarter of 2008, the weight of OTC drugs in total retail turnover reached 19%," said Buluc.
Farmexim is one of the first distributors to be set up in Romania, 18 years ago, and the company's 2008 turnover is expected to top 180m euros.
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