Sopharma Q3’24 net income improves 155.4% YoY, 1.2% better than our expectations (NEUTRAL)

31.10.2024 Source: Sopharma; FFBH

Sopharma’s Q3’24 stand-alone sales declined by 8.3% YoY to BGN 60.3m, in line with preliminary announcement. EBITDA, however, was only slightly (-2.2% YoY) down improving the margin to 17.3% vs 16.2% in the comparable period. Below the EBITDA line, positive effects came from the lack of impairments of long-term assets and the lower financial cost. Q3 net income improved by 155.4% YoY to BGN 4.5m (EPS of BGN 0.03), 1.2% better than our expectations. 9m’24 sales were down 8.4% YoY with sales to the main markets being mixed - Bulgaria and Ukraine added respectively 1.7% YoY and 4% YoY, while the decline of Russian sales picked-up to 22.6% YoY. EBITDA dropped 28.9% YoY to BGN 42.1m due to the increase of OPEX by 0.5% YoY, mainly for compensations and hired services. Net income fell 29.6% YoY to BGN 26.8m (EPS of BGN 0.16). On the balance sheet, non-cash working capital was up by BGN 172m 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 15.2m since the beginning of the year. IB debt added BGN 1.9m YtD to BGN 103m (IB debt to equity of 16.6%) while 9m’24 CAPEX amounted to BGN 14.1m.