Grupo Casa Saba (NYSE: SAB)
Financial Highlights: (All figures are expressed in millions of
Mexican pesos. Comparisons are made with respect the same period of
2010, unless otherwise stated. Figures may vary due to rounding
practices).
- During the second quarter, GCS's net sales reached $12,084.36
million
- Gross income for the period was $2,131.57 million, resulting in
a gross margin of 17.64%
- Quarterly operating expenses were $1,745.81 million pesos;
operating expenses as a percentage of sales were 14.45%
- Operating income reached $385.76 million during 2Q2011, which
resulted in an operating margin of 3.19%
- Operating income plus depreciation and amortization for 2Q2011
was $495.90 million
- The quarterly CCF rose by 235.08% versus the same period of the
previous year, primarily as a result of higher interest
payments
- Net profit for the quarter was $69.07 million, a decrease of
58.40% versus the same quarter of 2010
- As of June 30, 2011 the Company's net debt was $10,145.63
million pesos
Mexico City, Mexico, July 28, 2011. Grupo Casa Saba (SAB)
("Saba", "GCS", "the Company" or "the Group"), one of the leading
Mexican distributors of pharmaceutical products, health and beauty
aids, personal care and consumer goods, general merchandise,
publications and other products and one of the most important
pharmacy chains in Latin America, announces its consolidated
financial and operating results for the second quarter of 2011.
QUARTERLY EARNINGS
During the second quarter of 2011, our Distribution division
reported mixed results, primarily as a result of the competitive
environment that exists in the national market for the sale of
pharmaceutical products. Given that current market conditions, as
well as other factors, have provoked an increase in our accounts
receivable days with some clients, we are actively working with
clients and providers in order to improve our growth and
profitability levels. In addition, internally we are implementing
strict measures aimed at controlling operative and administrative
costs as well as inventory management and control measures which we
expect will allow us to improve our levels of operative efficiency
and profitability.
In our Retail Pharmacy division, the results that were obtained
during the quarter were positive, particularly in terms of
operational efficiency and, therefore, profitability. The plans
that were implemented to operate with greater control over expenses
are generating results that are in line with our expectations and,
at the country level (Mexico, Brazil and Chile) our network of
pharmacies has seen improvement in its efficiency indicators in
terms of operative expenses and, therefore, profitability.
We will continue with our operational strategy that is focused
on improving the efficiency of each of our business units, always
seeking to improve the availability of the products that our
clients demand.
NET SALES During the second quarter of
2011, net sales reached $12,084.36 million pesos, an increase of
59.27% compared to the same period of the previous year. This was
primarily the result of the consolidation of Farmacias Ahumada,
S.A.'s (FASA) sales and, therefore, the base is not the same for
comparative purposes. SALES BY DIVISION
(1)
DISTRIBUTION DIVISION
DISTRIBUTION - PRIVATE PHARMA Sales for
our Private Pharma division, at comparable figures, decreased
slightly (2%), primarily as a result of lower sales to special
clients, such as ISSSTE stores. With the elimination of Grupo Casa
Saba's sales to FASA and its subsidiaries for accounting purposes,
as of June 30, sales from this division reached $4,755.66 million
pesos.
This division represented 39.35% of the Group's overall sales
during 2Q2011.
DISTRIBUTION - GOVERNMENT PHARMA Sales in
our Government Pharma division increased 25.09% during the period,
from $269.01 million pesos in 2Q2010 to $336.50 million pesos in
2Q2011. This increase can be attributed, among other things, to an
increase in sales to various state health institutions.
As a result, during the second quarter of 2011, this division
generated 2.78% of the Group's total sales.
HEALTH, BEAUTY, CONSUMER GOODS, GENERAL
MERCHANDISE AND OTHER Sales in our Health, Beauty, Consumer
Goods, General Merchandise and Other division rose 15.52% compared
to the second quarter of 2010 to reach $776.74 million pesos in
total sales. This growth was primarily the result of an increase in
sales to supermarket chains, including seasonal categories and some
innovative product lines.
As a percentage of the Group's total sales, this division
represented 6.43% during the quarter.
PUBLICATIONS Sales for CITEM, the
Company's publications distribution division, declined 17.52%
during the second quarter of 2011 compared to the same period of
2010. This decrease was basically due to the fact that, in 2Q2010,
this division included promotional sales related to the Soccer
World Cup, an event that was not repeated during the second quarter
of 2011.
As a result, this division's participation as a percentage of
total sales was 1.67% in 2Q2011.
RETAIL PHARMACY With the incorporation of
FASA's sales, the Retail Pharmacy division reported sales of
$6,013.10 million pesos for 2Q2011. This was higher than the
$709.13 million pesos that it reported during the same period of
2010, when FASA was not consolidated. As a result, this division
generated 49.76% of the Company's overall sales for the second
quarter of 2011.
Based on the new sales breakdown, the distribution business
represented 50.24% of total sales and the retail pharmacy business
49.76%.
GROSS INCOME During the quarter, Grupo
Casa Saba's gross income was $2,131.57 million, an increase of
154.13% with respect to the same quarter of the previous year, when
gross income totaled $838.75 million pesos. This increase reflects
the consolidation in 2011 of FASA in the Group's numbers and, as a
result, the previously-mentioned comparison is not made over a
similar base. The company's gross margin for the quarter was
17.64%, which was higher than the 11.05% margin posted in 2Q2010.
The increase in the margin versus the previous year was due to the
consolidation of FASA in Grupo Casa Saba's results during 2011. It
is important to note that, due to the nature of the business, our
Retail Pharmacy division operates with a gross margin level that is
higher than our Distribution division.
OPERATING EXPENSES During the second
quarter of 2011, GCS's operating expenses reached $1,745.80
million, 206.67% higher than the $569.28 million pesos registered
during the same fiscal period of 2010. This was primarily due to
the consolidation of FASA's results. Due to the nature of the
business, the Retail Pharmacy division operates with an expense
level than is higher than our Distribution division. Consequently,
the figure registered during 2Q2011 is not comparable with that of
2Q2010.
Operating expenses accounted for 14.45% of our total sales in
2Q2011.
OPERATING INCOME Quarterly operating
income was $385.76 million pesos, 43.16% higher than the $269.47
million registered during the same period of 2010. This increase is
derived from different bases given that the 2Q2011 figure includes
FASA's consolidation in GCS.
As a result, the operating margin for the period was 3.19%, 36
basis points lower than the 3.55% margin reported in the same
quarter of 2010.
OPERATING INCOME PLUS DEPRECIATION AND
AMORTIZATION Operating income plus depreciation and
amortization for 2Q2011 was $495.90 million pesos, an increase of
74.56% compared to the $284.08 million pesos obtained during the
second quarter of 2010. This increase includes the consolidation of
FASA.
The company's operating income plus depreciation and
amortization margin for the quarter was 4.10%, which compared
favorably with the 3.74% margin registered during the same quarter
of the previous year.
INTEREST-BEARING LIABILITIES At the end of
the second quarter of 2011 the company's net debt totaled
$10,145.63 million pesos, 2% lower the figure that was reported in
1Q2011.
COMPREHENSIVE COST OF FINANCING (CCF) The
CCF for the quarter went from $79.46 million in 2Q2010 to $266.26
million during the second quarter of 2011, an increase of 235.08%.
This was primarily due to the increase in interest payments related
to the credits the company obtained in order to acquire FASA as
well as an exchange rate loss in the amount of $38.09 million
pesos.
OTHER EXPENSES (INCOME) During the second
quarter of 2011, the Company registered an income in the Other
Expenses (Income) line item of $11.96 million pesos compared to an
income of $13.87 million obtained during the same period of the
previous year. It is important to mention that the results listed
in this line item are derived from activities outside of the
company's normal business operations.
TAX PROVISIONS Tax provisions for this
fiscal period totaled $62.38 million pesos, 64.84% higher than the
$37.84 million pesos reported during the same quarter of 2010.
Income tax for the period ending June 30, 2011 was $192.40 million
pesos, 408.40% greater than the income tax provision registered in
2Q2010, and which was partially offset by a deferred income tax
charge of $130.01 million pesos.
NET INCOME The Group's net income for the
quarter was $69.07 million pesos during the second quarter of 2011,
a decrease of 58.40% compared to the $166.03 million pesos
registered as of June 30, 2010.
The net margin for the period was 0.57%, 162 basis points lower
than the 2.19% net margin obtained during the same quarter of
2010.
WORKING CAPITAL During the second quarter
of 2011, the Group's accounts receivable days were 50.1 days.
Inventory days at cost reached 71.0 days and accounts payable days
were 78.4 days.
(1) As part of its strategy to increase the company's
profitability, Grupo Casa Saba has completed acquisitions in
several South American countries, beginning in May 2008 with the
acquisition of the Brazilian pharmacy chain Drogasmil (Casa Saba
Brasil). In September 2010, the company acquired 97.8% of Farmacias
Ahumada, S.A., a chain of more than 1,200 pharmacies with
operations in Chile, Mexico and Peru and, as a result, created a
new division known as "Retail Pharmacy."
As a result, the majority of the figures presented in this
report are not comparable with those that were reported during the
same quarter of 2010.
Contacts: GRUPO CASA SABA Sandra Yatsko IR +52 (55)
5284-6672 Email Contact Alejandro Sadurni CFO Email Contact IR
Communications: Jesus Martinez Rojas +52 (55) 5644-1247 Email
Contact
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