Pharmacy Chain 36.6 H1 2007 preliminary results

AUGUST 9, 2007, MOSCOW – OAO Pharmacy Chain 36.6 [RTS:APTK; MICEX:RU14APTK1007] announces preliminary results on sales volumes and business operations for the first half of 2007 according to management reports.

Sales

• The consolidated sales for H1 2007 according to management accounts totaled US$385 million, which represents 77% y-o-y growth.*
• Sales in the pharmacy segment amounted to US$300 million, an increase of 90% y-o-y.  In Q2 2007 retail sales amounted to US$151 million, up 78% over the same period in 2006.
• Veropharm [RTS:VRPH, MICEX:VRFM] sales grew 29% and reached US$58.2 million.
• During H1 2007 sales of the European Medical Center (EMC) totaled US$12.9 million.

Number of stores

• At the end of H1 2007 Pharmacy Chain 36.6 had a total of 936 pharmacies situated in 26 regions throughout Russia.  Pharmacies in the regions accounted for 54.3% of sales in the pharmaceutical retail segment.
• In Q2 2007 Pharmacy Chain 36.6 acquired the Zdravnik pharmacy chain, which included 48 pharmacies in the city of Yekaterinburg and surrounding Sverdlovsk region. In 2006 the Zdravnik chain reported US$23.4 million in revenues.
• During Q2 2007, a total of 43 pharmacies were opened organically, 7 pharmacies were rebranded and 9 pharmacies were closed.
• In Q2 2007 the fifth Early Learning Center (ELC) store was opened in Moscow.

Operational results for retail business

• During the first half of 2007, 46.4 million purchases were made, which is 80% more than in the same period of 2006.  The average receipt for pharmacies operating more than a year rose by 35% and reached US$8.4; the average receipt for the Moscow business unit was up 34% to US$11.6, while the average receipt in regional pharmacies rose 38% to US$6.0.
• Average sales floor size at the end of H1 2007 was 62.7 square meters, down 15% y-o-y. 
• Revenues per square meter of sales floor in pharmacies that had been operating for more than a year totaled US$5400, up 33% y-o-y. Revenues per square meter in Moscow pharmacies were up 25% to US$5900, while revenues per square meter in the regional pharmacies were up 44% to US$5100.
• Sales growth (like-for-like, in US dollars) in the chain’s pharmacies that had been opened or acquired prior to 1 January 2006 amounted to 34.6%. Sales growth at the matured pharmacies was primarily due to a higher average ticket size at the regional pharmacies.

Debt

• The net debt of Pharmacy Chain 36.6 at the end of H1 2007 stood at US$263.6 million, including US$21.4 million of Veropharm’s debt.

* here and hereinafter financial indicators may significantly differ from the IFRS consolidated data.

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