Sopharma Trading Q4’19 EPS improves 20% YoY (POSITIVE)

Q4’19 unconsolidated revenue of Sopharma Trading grew 7.4%YoY to BGN 196.1m, while the domestic pharmaceutical market added 6.4%. Pharmacy sales declined 4.1% YoY, hospital sales surged 21.3% YoY, pre-distribution sales grew 39.3% YoY and medical equipment sales dropped 51.6 YoY. Gross profit added 0.5% to BGN 16.9m with margin down to 8.2% vs 8.8% in Q4’18. EBITDA increased 28.1% YoY as part of the rental cost was transferred to depreciation and interest as a result of the introduction of IFRS 16 and due to the lack of impairments. Still, net income grew 19.9% to BGN 5.9m (EPS of BGN 0.17). 2019 revenues and gross profit increased 7.8% and 7.7% respectively with no change in gross margin. EBITDA surged 21.5% to BGN 29.7m on the same reasons as in Q4 alone. Net income came to BGN 20m (EPS of BGN 0.58), +11.5% YoY. IB debt was up by BGN 13.8m YoY, partly due to IFRS 16 while IB debt/equity was down to 176% following the capital increase. Non-cash working capital was also up BGN 18.1m YoY, mainly on increased receivables. CAPEX (excluding the investments in subsidiaries) came to BGN 9m.