Superfos posts solid interim figures
for its pharmaceutical division, Danish packaging firm Superfos has
reported a healthy increase in earnings helped by the resolution of
delivery problems that plagued it last year.
The company's earnings before interest, taxes, depreciation and amortization (EBITDA) rose by 44 per cent in the first six months to €32 million, while turnover was in line with the same period of 2003 at €181 million.
In June, Superfos abandoned plans to sell off Superfos Pharma saying no-one was prepared to meet its price tag for the business, which makes plastic containers and closures for the pharmaceutical industry.
Superfos had decided that because pharma contributed only 6 per cent of consolidated revenues of €352 million last year, and served a completely different customer base than its core food and industrial businesses, it would fulfil its potential better in other hands.
However, a 26 per cent increase in sales in the first half of this year suggests that its decision to keep the business could be a good one, and that pharma could increase in importance at the Danish group.
Superfos Pharma's key ranges are the Duma and Dudek containers, and the firm recently launched a new product designed to be easier to open by patients with reduced physical function, such as those with arthritis.
Superfos said that one of the main contributors to the result was the resolution of delivery problems that plagued the business in the first half of last year, which have now been solved by a series of measures including the purchase of new technology, cutting costs by 9 per cent.
"The reduced cost base has increased our competitiveness and partly compensated for the impact of the intensified price competition that we experience in a number of markets and within selected segments," said chief executive Kim Anderson. Furthermore, he said the business had not been exposed to the fluctuations in raw material prizes as in the first half of 2003.
Superfos Pharma increased production capacity earlier this year though the acquisition of a new property in Vaerlose, and this helped drive the growth in revenues. Like many companies supplying the pharmaceutical industry, Superfos is seeing the greatest growth in demand for its products from manufacturers of generic drugs.
This growth led to a 60 per cent improvement in earnings before interest, taxes and amortisation (EBITA), said Anderson. For the group as a whole, EBITA doubled to €17.5 million.
Geographically, the growth markets for Superfos were the southern European countries and Germany, Poland and the US. In the latter market, Superfos reported revenues up by 25 per cent an EBITA up by 35 per cent.
