The Egyptian International Pharmaceutical Industries Company (EIPICO) has reported revenues of EGP 1.46bn in the first half (H1) of 2020, compared to the EGP 1.75bn reported in H1 of 2019.
The latest figures reflect a 17% year-on-year (y-o-y) decline in comparison to the 2019 figures.
The company reported that the drop in revenues was mainly driven by a 10.07% drop in local sales, to record EGP 1.10bn, despite local sales contributing 75.6% (+5.8pps y-o-y) to total revenues.
This came in addition to a 49.9% drop in tenders sales, to EGP 103m, which contributed 7.0% of total revenues (-4.6pps y-o-y). This can be partially explained by the shift to distributors, with distributor sales recording EGP 696.7m, or 47.8%, of total consolidated revenues. Distributors accounted for only 38% of total consolidated revenues in 2019.
EIPICO underperformed on the market, reporting an aggressive 31% decline in retail sales, and a decline of 26% in number of units. This can be compared to the 5% and 9% decline in retail market sales and number of units, respectively. The underperformance can be attributed to the majority of EIPICO’s product portfolio not being in focus due to the novel coronavirus (COVID-19) pandemic.
Net profit dropped to EGP 262m, compared to EGP 398m, recording a decline of 34.2% and implying a slump of 4.7pps in NPM to reach 18.0%.
According to the latest IMS Health data, Egypt’s retail pharmaceutical market registered a 5% y-o-y decline in total sales, reporting EGP 29.85bn between January and May 2020, compared to EGP 31.4bn during the same period in 2019.
During January to May 2020, retail volumes showed a decline of 9% y-o-y, to reach 941.98 million units. Weak retail market growth is primarily driven by challenges imposed by the global pandemic, including movement restrictions and the closure of outpatient clinics at public hospitals. This had the knock-on effect of causing a drop in demand on medication for non-chronic diseases.
The retail market performance in H2 of 2020 is dependent on a second wave of the coronavirus occurring, which might hit in the fourth quarter (Q4) of 2020. It is anticipated that this is likely to occur after movement restrictions are lifted, and despite a partial economic recovery.