Sep 24 - 30, 2007
ABOUT THE COMPANY
Abbott Pakistan is an affiliate of Abbott Laboratories, Chicago, USA. It started operations in Pakistan as a marketing affiliate in 1948. The company has steadily expanded to comprise a work force of over 1500 employees. Currently two manufacturing facilities are located at Landhi and Korangi in Karachi continue to use innovative technology to produce top quality pharmaceutical products. The company has leadership in the field of Pain Management, Anesthesia, Medical Nutrition, Anti-Infectives and Diagnostics. Their wide range of products is managed and marketed through four marketing arms. The Diagnostic Division operates from its office located at Korangi, Karachi. With leading products in several key segments of the diagnostic market, Sales and support staff are available in all the major cities of the country. A continuous process of innovation, research and development at Abbott's worldwide facilities enables Abbott Pakistan to offer effective solutions for various healthcare challenges, with products and services that are well focused, within the customer's reach and contribute to improved health care of the people of Pakistan.
Abbott's wide range of products is managed and marketed through four marketing arms i.e. Pharmaceutical, Nutritional, Hospital Products and Diagnostics.
Pharmaceutical Division: Pharmaceuticals often represent the first, and one of the safest, least expensive treatment option for doctors and their patients. The opportunity to serve patients in key areas of medicine where they have scientific and medical expertise is the guiding principle of Abbott Pakistan's pharmaceutical division.
Nutritional Division: Abbott has been in the field of nutrition since the turn of the twentieth century. As of now their growing family of quality nutritionals is helping them raise scientifically advanced nutrition to new heights, and their name remains synonymous with one of the most trusted nutritional brands in Pakistan, from infancy to adulthood.
Hospital Products: Abbott provides leading anesthesia products, pain management pumps intravenous systems and other health care technologies and specialty products both for hospital and increasingly, for home care use.
Diagnostics: The history of Abbott's Diagnostics Division is an impressive record of innovation. Abbott products have helped transform the practice of medical diagnosis from an art to a science, virtually creating the modern diagnostics industry through the company's commitment to improving patient care and lowering overall costs.
Half year and second quarter result were affected by uncertainty in the market. The pharmaceutical segment which represents 85% of the company's total business was impacted by uncertainty in the market. Overall sales revenue increased by 11% to Rs.3,168m while the cost on the other hand grew handsomely posting growth of 23% to Rs.1,918m, shrinking the gross margins to 39% from 45% at the end of last half year. Selling and distribution expense increased in line with inflation while administration expenses were contained at the same level. Other operating income mainly representing return on cash deposits increased substantially as improved working capital management led to significant rise in surplus funds available to the company. Other income supported the bottom lines and rose by 66% to Rs.88m. Fall in the gross profit coupled with increase in selling and distribution expense led to decrease in both profit before tax and profit after tax. On the while profitability went down by 6% to Rs.505 (EPS: Rs.5.16) as compared to Rs.538m (EPS: Rs.5.50) in the last half year.
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First phase of the plant expansion and up-gradation project was completed during 2006 at a total cost of Rs.450m. The new facility has improved the plant capacity and productivity. Cost effectiveness was also looked after during 2006 and number of other smaller value adding projects were completed which has enhanced the overall efficiency and productivity of the plant.
Company's 85% of the business is generated through sale of pharmaceutical products. The government has not allowed any price increase since 2001, however, during the span of seven years the raw material prices has escalated by many folds. The company has urged the government to look into the matter and formulate a mechanism whereby the price increase in registered products is allowed in line with the inflationary trends in the country. Until the request materializes the company is well focused towards product portfolio optimization strategies.