Farmak reported 2019 financial results. The performance of the Company remains at a consistently high level.
According to IFRS-compliant financial statements, the amount of money spent on capital investment in 2019 was UAH 714 million, which is 14.5% more than at the end of 2018. The revenue of Farmak reached UAH 6.542 billion, net profit reached UAH 1.056 billion. The financial statements were audited by Deloitte & Touche Ukrainian Services Company LLC.
The capital investment of Farmak in 2019 amounted to UAH 714 million, which is 14.5 % more than in the previous year. These funds were allocated for the construction of the new facility for manufacture of liquid medicinal products, upgrading and retrofitting of the existing facilities, completion of equipment for new tablet manufacturing facility, bringing manufacturing facilities in line with the FDA requirements, upgrading fleet, implementation of energy-saving projects, retrofitting of the laboratory complex with innovative devices and equipment, implementation of IT projects for the automation of many business processes that are required at modern pharmaceutical manufacturing facilities. The Company has launched the integrated business planning (IBP) project which will cover all key processes of the planning chain, starting from demand and supply to optimization of residues and will improve the turnover and reduction of the financial cycle.
In 2019, the EBRD provided Farmak with funding in the amount of EUR 15 million for five years. These investments will be used by the Company for the expansion of manufacture and modernization of research laboratories that will contribute to the development of innovations, introduction of industry best practices and competition stimulation among domestic pharmaceutical manufacturers.
The Company continues to adhere to the strategy of export potential development. In 2019, export sales amounted to 24.2 % of total revenue. Farmak products were bought in 28 countries. The Company remains in the top three in Uzbekistan, and continues to operate in well-regulated markets. Today the Company cooperates with the partners from the European Union, South East Asia, MENA region, Australia and New Zealand. For example, 37 medicinal products have been already registered and 7 medicinal products are under the registration process in Europe.
“Pandemic showed the importance of the pharmaceutical industry for human life. The pharmaceutical market is one of the most dynamic in the world due to fast expansion of the range of medicinal products and big demand for them. Export capacity development of medicinal products enhances the image of the country as an international player, ensures the creation of high value-added product and guarantees the receipt of currency earnings to Ukraine. However, the strategy of the country’s exports of pharmaceutical products is not among promising sectors for the development of the exports according to the Export Strategy of Ukraine. The State assistance in terms of the development of export of medicinal products could also make a significant contribution to the development of domestic manufacture and high-tech industry as a whole. Pharmaceutical companies ensure approximately 1 % of GDP and pay considerable sums to the budget as taxes. The results of 2019 show that the amount of Farmak’s tax deductions was about UAH 650 million. But most important is that pharmacists and doctors today save millions of lives in the world. This year the Company celebrates its 95th anniversary. Today Farmak concentrates advanced technology, innovative solutions and powerful scientific potential. The investments in scientific-technical complex, manufacturing equipment, research activities have amounted to UAH 3.4 billion over the past five years. Farmak annually invests over USD 15 million in research and scientific development. Today the Company employs 150 researchers, including 42 candidates of sciences and 5 doctors of sciences. We conduct the research of our medicinal products in European laboratories and at research sites in the United States. Therefore, we will increase our investment in research and development. We plan to increase the amount of investment in 2020. The funds will be primarily used to build a new laboratory and office centre, which will hold the development of modern multi-component medicinal products that will save many lives,” said Volodymyr Kostiuk, Executive Director of JSC Farmak.
In 2019, Farmak introduced 20 new products into manufacture and expanded its portfolios of anti-cold, anti-allergic, neurological and gastroenterological products and launched new medicinal products in its new pulmonary portfolio.
