Sopharma reported Q2’24 stand-alone sales of BGN 56.9m, down by 6.3% YoY, in line with preliminary announcement. EBITDA dropped 60.8% YoY as most expenses increased despite the declining sales. The company booked BGN 1.3m gain from sales of shares in subsidiaries and associates as well as positive net financial income, which partly saved the bottom line. Still, net income for the period fell 65.6% YoY to BGN 7m (EPS of BGN 0.04), 51% short of our expectations. H1’24 sales were down 8.4% YoY with sales to the main markets being mixed - Bulgaria added 6.3% YoY, while Russia and Ukraine dropped respectively 19.7% YoY and 17.4% YoY. The other operating income showed improvement on higher income from services and profits from the sales of goods and non-current assets, which was not enough to offset the increase of OPEX by 12.8% YoY. Thus, EBITDA declined 34.7% YoY with margin being 11.1% smaller at 27.6%. Net income fell 38.6% YoY to BGN 22.3m (EPS of BGN 0.13). On the balance sheet, non-cash working capital was up by BGN 162.2m from the beginning of the year as the company had unpaid dividend on the liability side at the end of 2023. Recall that the shareholders approved BGN 0.90 per share in November. In addition, inventories have grown by BGN 15.4m since the beginning of the year. IB debt declined by BGN 5.9m YtD to BGN 95.2m (IB debt to equity of 15.5%) while H1’24 CAPEX amounted to BGN 5.7m.