Sigma issues profit warning
July 15, 2010
SIGMA Pharmaceuticals this
morning confirmed that its full year
profit is likely to be as much as a
third lower than previously
expected, due to the performance
of its generics business, “the
continuing volatility of the industry
generally” and significant one-off
corporate costs incurred due to
consideration of the takeover
proposal from its South African
suitor Aspen Pharmacare.
The company said its full year
after-tax profit is expected to be in
the range of just $43m-$47m, but
said that the “underlying EBTDA”
would be in the range of $190m-
$200m for the year.
“Sigma’s performance in the first
five months of the financial year
has been sound in most areas of
the business,” the company said.
“The Consumer, Manufacturing,
Medical and Retail businesses have
all performed broadly in line with
expectations,” a statement added,
with the Wholesaling business
recording 9.3% year on year sales
growth.
However “performance in the
Generics Division remains below
budget” due to intense competition.
“Sigma believes this is primarily
due to suppliers seeking market
share in anticipation of substantial
future growth in the generics
market,” the company said,
warning that there was also
considerable uncertainty remaining
concerning the “short term impact
of foreshadowed regulatory
changes” in the Australian market.
The board said it was continuing
to closely monitor performance,
with further guidance expected
when Sigma releases its half year
results in the coming months.
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