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South Africa's Adcock says Q2 profit under "extreme pressure"
March 19, 2014 / 10:36 AM / 4 years ago

South Africa's Adcock says Q2 profit under "extreme pressure"

JOHANNESBURG, March 19 (Reuters) - South African drugmaker Adcock Ingram Holdings Ltd said quarterly profit was under “extreme pressure” as debt-laden consumers cut back on self-medication and the weaker rand pushed up costs of imported raw materials.

Shares in the nation’s second-biggest drug maker fell 2.7 percent to 57.53 rand by 1017 GMT on Wednesday, lagging a flat JSE All-share index.

Adcock has been at the centre of a takeover battle between South Africa’s Bidvest and Chile’s CFR Pharmaceuticals.

The winner, industrial conglomerate Bidvest, has since replaced Adcock’s chairman with Bidvest’s CEO Brian Joffe to help return the company to profitability.

Adcock said it has started re-evaluating its process and structure. It said it would pay more than 100 million rand ($9.32 million) in costs related to the failed CFR bid.

Revenue in the quarter to end-February was largely flat, the company said, citing a “concerning” performance from its prescription and over-the-counter portfolio and weaker rand currency.

The company has the largest share of South Africa’s market for over-the-counter drugs, most of which are not covered by medical insurance and therefore sensitive to a downturn in consumer spending. ($1 = 10.7320 South African Rand) (Reporting by Tiisetso Motsoeneng, editing by Louise Heavens)

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