Oriola’s profitability improved and turnover increased – Good demand for more expensive medicines is one of the drivers

Drug dealer Oriola has been stuck with the Swedish dose distribution since April, and no solution has been found. Even the results bulletin published today did not offer any further insight into the matter. The company promises to comment on the next steps during the fourth quarter, as the appeal process takes a maximum of six months.

On the results side, however, Oriola’s report offered small reasons for joy. The company’s adjusted operating profit in July–September increased by a percent to 5.5 million euros, while it was 4.4 million euros in the comparison period a year ago. Analysis service Factsetin the forecast average collected from two analysts was 5.5 million euros, just in line with what was realized.

In the third quarter, Oriola’s turnover grew by 18.6 percent to 424.4 million euros from 357.9 million euros a year ago. Analysts’ turnover forecast was an average of 382 million euros, and the company exceeded it by leaps and bounds.

The reported operating profit, on the other hand, rose to the plus side to 0.2 million euros from -17.1 million euros in the comparison period, while the analysts’ forecast average was still slightly more on the plus side at 4.6 million euros.

Oriola’s earnings per share in the third quarter was EUR -0.01, while the comparison figure from last year was -0.11 EUR and the analysts’ expectation is now EUR 0.01.

Distribution segment as a growth driver

Oriola’s turnover increased to 424 million euros in the third quarter thanks to the Distribution segment. In the Distribution segment, turnover increased by 23 percent to 351 million euros, mainly due to one customer moving from store sales to Oriola’s warehouse. In the Wholesale segment, turnover remained at the previous year’s level and was 74 million euros.

“The stable development that started at the beginning of the year continued in the third quarter, when turnover and profitability improved from the previous year. The growth in the value of the pharmaceutical distribution market also continued stable thanks to good demand for more expensive pharmaceuticals”, CEO of Oriola Katarina Gabrielsson says in the results release.

“Profitability was improved by the increase in turnover and lower transport costs than the previous year. Operating profit without the impact of the Swedish portion distribution business improved to 5.4 million euros. Oriola’s financial position remained strong.”

Oriola’s market share was stable in Finland, while it decreased in Sweden. During the quarter, the company managed to both renew distribution contracts and sign new ones.

“One of the new customers is a contract that crosses market borders, within the framework of which deliveries will begin in the first quarter of 2025. In Sweden, we expanded our operations to the sales channel of opticians, which we estimate also offers opportunities for the wholesale business.”

Views unchanged

Oriola repeated his view in the interim report. According to the company, the growth of the pharmaceutical distribution market is expected to continue in 2024.

“If consumer confidence remains weak, it can affect the development of the health products wholesale market. The recent general inflation in the operating environment and the associated cost pressures may have a negative impact on Oriola’s profitability.”

Oriola’s adjusted operating profit for 2024, excluding the portion of the Swedish portion distribution business, is estimated to increase compared to the adjusted operating profit for 2023, i.e. EUR 19.5 million.

“Our refined strategy was announced a year ago, after which we have steadily progressed towards our goal of being a leading expert in the wholesale trade of pharmaceuticals and health products,” says Gabrielsson.

“Our strategic investment in renewing the enterprise resource planning system (ERP) and warehouse management system (WMS) is progressing according to plan. We have reviewed and harmonized processes to ensure consistency and common working methods throughout the company.”

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