Antibiotice Iasi � impacted by currency exchange rate

“A major negative impact over profit was triggered by the depreciation of the local currency, Antibiotice importing (according to 2007 data) nearly a third of the raw materials. Another underlying reason of the weak performance was the lockdown of drug prices. In February 1, 2009, Antibiotice reset the price of half of its products to a 4 lei/euro exchange rate, which drove an average price increase of 20%. Last year, the drug prices within the company’s portfolio were frozen at 3.33 lei/euro exchange rate . The company expects a 10% increase of turnover and 15% of profit this year”, Andreea Gheorghe explained.

The drug producer Antibiotice Iasi (ATB) reported 10.17 million lei net (2.76 million euro).

Andreea Gheorghe said she expected Antibiotice Iasi to meet the turnover target, but not the profit target for 2009, which could be lower, depending on the evolution of the exchange rates.

“At a roughly 1 BETA, Antibiotice Iasi could not be included in defensive stock category, “probably due to its wide exposure of results to the evolution of leu against euro or to the dependence of drug prices to the market regulation”, the analyst explained.

The company had a share capital of 45.49 million lei, divided into 454.9 million shares of 0.10 lei nominal value. The majority shareholder of the company is the Authority for State Asset Recovery with 53.02% stake. FIC Oltenia holds 10.10% stake.

Early last year, ASAR decided to publish the abrogation of the sale bid of Antibiotice Iasi and the full refunding of amounts paid by investors for the file and for the access to data room.

At the same time, ASAR said it would resume the privatization procedures for the company in compliance with the European Commission requirements, taking into consideration the economic and social weight of SC Antibiotice SA Iasi.