* Diluted headline EPS 422 cents vs consensus for 430 cents
* Sales flat at 4.6 billion rand
* Shares fall almost 3 percent
(Adds analyst comment, shares)
By Tiisetso Motsoeneng
JOHANNESBURG, Nov 27 South African drugmaker
Adcock Ingram reported a worse-than-expected 9 percent
fall in annual earnings, hit by the loss of high-margin drugs.
The country's second-largest drugmaker has struggled in
recent months after losing three drugs that contributed as much
as 200 million rand ($22.60 million) in sales due to safety
reasons. Its failure to win a bigger share in the government
HIV/AIDS drugs supply contract added to the headwinds.
Adcock said diluted headline earnings per share - the main
profit gauge in South Africa - totalled 422 cents in the year to
end-September, from 465 cents a year earlier.
The results fell short of the 430 cents forecast by
StarMine's SmartEstimate, which gives more weight to forecasts
from top rated analysts.
"Disappointing set of results that reflect a weak pricing
power," Jean Pierre Verster, an analyst at 360ne Asset
Management. "It also continues to show the impact of the loss of
key drugs and lower anti-retroviral drugs volumes."
South African health authorities granted drug manufacturers
a 2.14 percent drug price increase for certain prescription
drugs in March this year, a hike analysts say did not keep up
with the rising cost of imported raw materials due to a weaker
Shares in the company dropped 2.9 percent to 53.15 rand by
1357 GMT, on course for the biggest daily percentage decline in
more than five months and underperforming a slightly higher JSE
The company said sales were largely flat at 4.6 billion
rand, but it raised its final dividend by 8 percent to 115 cents
Shares in Adcock are down nearly 12 percent so far this
year, far behind its closest rival Aspen Pharmacare,
which has surged more than 60 percent.
The Midrand-based company, which aims to earn more than 30
percent of its sales outside South Africa in three years, has
been dwarfed by Aspen, which has made an aggressive push in
overseas markets such as Australia.
Adcock recently agreed to pay $86 million to buy a portfolio
of drugs and a distribution network from India's Cosme Farma to
bulk up its presence in that country's $16 billion
Adcock's small operations in Ghana and Kenya reported no
growth in sales over the period, hit by safety recalls due to
illegal distribution of fake products and factory upgrades.
($1 = 8.8511 South African rand)
(Reporting by Tiisetso Motsoeneng; Editing by Louise Heavens)