Siegfried saw API revs slide in 1H, but earnings up on synergies

Siegfried facility in Zofingen (source Siegfried)

Siegfried Holding AG saw higher earnings in the first half of 2017 with cost synergies offsetting the negative impact facility maintenance work had on its API business.

The Swiss firm saw revenues for the six months ended June 30 fall 1.2% to CHF349.1m ($362m). Active pharmaceutical ingredients (API) and intermediates – drug substances - generated CHF262.9m, down 3.4%, while finished drug sales increased CHF4.8m to CHF86.2m.

Siegfried said the decline in API sales was “due mainly to a shift of necessary maintenance downtimes from the 2016 financial year to the first half of 2017.

In contrast, the firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) grew by 20.9% to CHF52.9m and its margin grew 2.8% to 15.2%. Net profit increased 55.1% to CHF21.6m.

CEO Rudolf Hanko said: “Siegfried again posted sound results. In only the second year following the acquisition of BASF’s API business, including three production sites, we took considerable advantage of synergies while keeping sales stable.

Therefore,” he continued “Siegfried returned to the lower end of the EBITDA target corridor of 15 – 20% earlier than expected, thereby providing a very good basis for the company’s continued strategic development.”

One such development was the expansion of the firm’s deal with US drug manufacturer Bristol-Myers Squibb, further details of which were not disclosed.

In addition, in May, Siegfried announced it had been hired by Symphogen A/S to provide fill/finish services for biologic drugs.

Capacity

Siegfried predicted that its pharmaceutical intermediates plant in Nantong, China – which was approved by Government authorities last summer – will be inspected by the US Food and Drug Administration (FDA) next year.

It also said that capacity utilization at its recently established facility in Zofingen, Switzerland is expanding, adding that when the plant is operating at full capacity it will close “inefficient” production plants it operates at the site.

Siegfried also confirmed that a logistics building it is constructing in Zofingen will be ready for use in the third quarter of 2018.

Outlook

The firm predicted that sales in the second half of the year will be stronger than in the six months to June, predicting that full year revenue will grow in the single-digit and EBITDA in the double-digit percentage range.

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