IMEXPHARM CORPORATION ANNOUNCES THIRD QUARTER 2024 AND NINE MONTHS ENDED 30 SEPTEMBER 2024 RESULTS
- Strong growth in September revenues which were up 28% year-on-year and 18% month-on-month
- Q3 revenues up 17% year-on-year and 5% quarter-on-quarter, driven by ETC channel revenue growth outpacing market and OTC channel recovery
- Nine months revenues up 12% year-on-year at VND1,553 billion, completing 66% of the 2024 revenue target propelling the Company towards a final result approaching its year end targets
- Sharp rise in September PBT up 42% year-on-year and 43% month-on-month
- Improving profitability in Q3 with PBT up 10%, EBITDA up 7% quarter-on-quarter and EBITDA margin at 22% in the quarter
- Completed bonus share issuance to become market leader by charter capital size
- Further steps taken to strengthen senior management team and the board:
- New Deputy CEO appointed, Ms Le Nu Minh Hoai, former General Director of United International Pharma with close to 30 years of experience in international and Vietnamese pharma
- New Board Member proposed: Mr Sung Min Woo, nominated as a new board member (pending shareholders’ approval) with over 20 years of experience in Asia
- Plans to build a new factory in Dong Thap, to expand further production capacity to diversify products and grow into new export markets, have been submitted for shareholder’s approval
HO CHI MINH CITY – October 18, 2024 – Imexpharm Corporation (“Imexpharm” or the “Company,” IMP.VN), a pioneering leader in Vietnam’s pharmaceutical industry, has announced its third quarter results for the three months ended 30 September 2024 (the “Reporting Period”).
During the Reporting Period, the Company continued to capitalize on its leadership position in the manufacture and distribution of high-quality pharmaceutical products and to aggressively drive revenues in the critically important ETC market. The Company also successfully completed its planned bonus share issuance to become the market leader by charter capital whilst appointing a pharmaceutical veteran as Deputy CEO and proposing a new board member, subject to shareholder’s approval, Mr Sung Min Woo, with over 20 years of experience in Asia.
Financial Highlights
Net revenue for the three months ended 30 September 2024 was VND545 billion, up 17% year-on-year. Imexpharm’ s ability to continue to capitalize on its leadership of the rapidly expanding ETC market helped drive this growth, with the Company seeing a 47% increase in Q3 ETC revenue year-on-year. This growth was sharply higher than the market if we compare this with 11% for the sector in the 1H of 2024 (the latest numbers available).
The OTC channel returned to positive territory with Q3 OTC up 8% year-on-year. The Company’s strategy to partner with pharmacy chains paid dividends with distribution to these chains increasing by 91% quarter-on-quarter in Q3, and 182% year-on-year. Total sales in the pharmacy chains channel for the first nine months of 2024 were up by 158% year-on-year.
PBT and EBITDA for Q3 were up by 5% and 3% year-on-year. For the first nine months of 2024 PBT and EBITDA rose to VND252 billion and VND334 billion respectively, down 12% and 4% year-on-year (compared with 19% and 7% down for the first six months of 2024) as IMP4 substantially ramped up to meet accelerating demand for its complex injectable antibiotic products with September 2024 revenue at IMP4 triple that of September 2023, and double when compared to August 2024.
EBITDA margin climbed to 22% by the end of the strong third quarter on the back of accelerating revenue growth, with production volumes growth at IMP4, as well as tight control of SG&A which was 2.8% up year-on-year.
Looking ahead to the final quarter of the year, the Company is encouraged by its September performance, in particular the demand for IMP4 products, and by the revival of the OTC channel through pharmacy chains. Imexpharm anticipates further improvements in EBITDA and is confident it will come close to meeting year-end targets as it gains momentum following the September performance. Imexpharm has made significant investments in IMP4 which is expected to translate into continuing strong revenue growth and optimized fixed costs.
Business Highlights
During the Reporting Period, demand accelerated for Imexpharm’ s IMP4 products and as a result the Company increased production volumes sharply at this factory, whilst also ramping up production at IMP2 and IMP3.
In the first nine months of the year, the Company launched 16 new SKUs with 99 ongoing R&D projects in its innovation pipeline.
Imexpharm implemented the latest SAP S/4HANA software becoming the first pharmaceutical company in Vietnam to adopt this advanced technology, setting new standards in operational efficiency and customer service.
Board of Directors and Senior Management Changes
The Company appointed Ms Le Nu Minh Hoai, former General Director of United International Pharma bringing 30 years of experience in international and Vietnamese pharma. A pharmacist by training, Ms Le Nu Minh Hoai graduated from the Medicine University in Ho Chi Minh City and holds an MBA from The Maastricht School of Management in the Netherlands.
Following the resignation on September 26th of Ms Chaerhan Chun, it is proposed that Mr Sung Min Woo be appointed as a director, subject to shareholder’s approval. Mr Woo has over 20 years of experience in Asia at SK and in management consulting. Prior to joining SK in 2015, Mr Woo was a Partner at Oliver Wyman, a leading international management consulting firm. Mr Woo majored in Information & Industrial Engineering at Yonsei University.
The Company expresses its sincere gratitude to Ms Chaerhan Chun, for her significant contributions to Imexpharm’s substantial growth, governance and management, transforming the Company into a pharmaceutical enterprise with an organizational and governance system aligned with advance international standards. Ms Chun will continue in her role until her resignation officially takes effect upon approval by the General Meeting of Shareholders, after which a new Chairman will be appointed.
Bonus Share Issuance
Imexpharm successfully completed its issuance of bonus shares, becoming the largest listed pharmaceutical company in terms of charter capital, and reinforcing its market leadership and competitive position. The increased number of shares in circulation stimulated more active trading in Imexpharm’ s stock and fulfilled the Company’s plan to strengthen its equity base and enhance its market liquidity, facilitating its expansion plans in the coming three to five years.
New Factory Investment Plan
The Company announced its plans, subject to shareholder’s approval, to build the Cat Khanh Pharmaceutical Factory Complex Project in Dong Thap. This new factory will enable Imexpharm to further diversify its product portfolio to meet rising demand and to expand into additional export markets. The planned project area would exceed 25,000 square meters, with an estimated investment of VND1,495 billion, funded by 20% equity and 80% debt. The Company aims to complete the necessary legal procedures by Q1 2025 and to commence construction in Q3 2025. The goal would be to complete construction by the end of 2028, and to commence commercial operations sometime between December 2028 and Q1 2030. The project plan has been submitted to the General Meeting of Shareholders for approval.
The Company also announced it would be liquidating certain investment stocks and unused real estate properties to recover investment capital for the Company to focus on new projects; these will include this new factory.
Market Outlook
The outlook for Vietnamese pharmaceutical companies continues to be positive, driven by recent government measures supporting local players, and Vietnam’s competitive advantages. Imexpharm anticipates increasing demand for its products, leveraging its over 45 years of history.
The Company continues to be encouraged by the Government’s Action Plan which was published in February 2024, and which was designed to implement Vietnam’s National Strategy for the pharmaceutical industry. The Action Plan expects the country’s local production capacity to meet 80% of domestic pharmaceutical demand and 70% of total market value by 2030.
Commenting on the results, Ms Tran Thi Dao, General Director and Board Director of Imexpharm, said, “I am immensely proud of Imexpharm and our over 1,400 people team’s achievements to date. In the quarter we continue to see strong performance by the Company, amidst accelerating demand for its products. Imexpharm has numerous competitive advantages, including an over 45 year-history; an ability to produce complex injectables; and a superb management team focused on creating shareholder value. I am confident that Imexpharm will continue to grow rapidly as it strives to become the largest pharmaceutical manufacturer in Vietnam, and a major player in the Asian pharmaceutical sector. I thank our people for their continuing efforts and dedication to Imexpharm. I would like to express our sincere gratitude, on behalf of the entire Imexpharm team, to Ms Chaerhan Chun who has made significant contributions throughout her tenure resulting in the transformation of Imexpharm to what it is today. She will be greatly missed.”
About Imexpharm
Imexpharm is a market leader in manufacturing and distributing high quality antibiotics in Vietnam. Over its 45 years+ history, the company has been a pioneer in Vietnam’s rapidly evolving pharmaceutical industry, focusing on international partnerships and operating at the highest safety and quality standards. Looking to the future, it is strategically and financially poised for growth domestically and on the global stage, and has been, and will continue to expand its portfolio into new treatment areas and wellness. At the end of the Reporting Period on the 30th September 2024, IMP’s share price had increased by 97% since the start of the year, significantly outperforming the VN-Index which rose by 14%.
Explanatory Note: Imexpharm, in line with standard industry practice, records its sales from individual channels as gross revenue.
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