By Brad Haynes
SAO PAULO, March 11 (Reuters) - Hypermarcas SA’s chief executive said on Monday the Brazilian drugmaker has started the year with weaker sales than expected, but reaffirmed its target for operating profit this year.
Strong pharmaceutical sales led to a better-than-expected profit to end 2012, but a tough holiday calendar and uncertainty about new taxes on imported ingredients have weighed on demand to start the new year.
“We believe those factors should be compensated over the course of the year, but at this point it looks like growth in the first quarter will be below our expectations,” CEO Claudio Bergamo told analysts on a call to discuss earnings.
The company is still aiming for earnings before interest, taxes, depreciation and amortization of 950 million reais ($487 million) this year, up 10 percent from 2012.
Ongoing frustration with weaker growth in Brazil may eventually strengthen Hypermarcas’ strategic position, Bergamo suggested, after a decade of robust economic expansion attracted the attention of major global rivals.
“A lot of foreigners in Brazil were spooked to find it’s a complex country where it’s difficult to compete. And the initial euphoria is beginning to cool. I actually see a less competitive environment now than we had in the past two years,” he said.
Shares of the company were little changed in Sao Paulo trading on Monday, retreating from a nearly 10-month high early in the session.
Asked about the possible sale of rival Brazilian drugmaker Ache Laboratorios Farmaceuticos, Bergamo said Hypermarcas remains focused on organic growth and is not participating in the bidding process.
“An eventual merger with Ache could indeed make strategic sense for both companies, given their hugely complementary product lineups,” Bergamo said. “But you would have to make a detailed evaluation to be sure it’s advantageous for Hypermarcas shareholders.”
Hypermarcas has spent the past year streamlining operations to generate cash after two dozen acquisitions since 2008 drove up debt levels and weighed on profitability.
Global drugmakers GlaxoSmithKline Plc, Novartis AG, Pfizer Inc and Abbott Laboratories are among those interested in Ache, which could be sold for $3 billion or more, sources told Reuters last month.
Ache and representatives for all four companies have declined to comment on the matter.