Sigma Posts Half-Year Profit

Submitted by Jim Thesiger on 15 September, 2009 - 06:26

A $32.2 million worth of net profit was posted by Sigma Pharmaceuticals (SIP) for the half year that ended in July 31st. The report indicates that the company is on the track to come up with a modest increase in profit for the full year. Due to a drop in sales and earnings, Sigma have seen its underlying net profit dropping 5.9 percent to $30.2 million excluding the $1.9 million of restructuring costs and $3.9 million worth of tax benefits. Chief executive of the company Elmo de Alwis stated that Sigma managed to come up with a modest result although the economic condition was not all that favourable. The achievement made by the company was a reflection of the defensive nature of the group, he added.

The preliminary half-year results were published by Sigma last week after it announced a $297 million capital raising, something that will enable the company to buy a manufacturing facility and 15 drug brands from Bristol-Myers Squibb- the US pharmaceutical giant. The institutional component of the capital raising was completed by the company. Sigma Pharmaceuticals was the third healthcare company that went for raising funds after private hospital operator Ramsay Health Care's raised $260 million and Healthscope went for $140 million worth of capital raising. Sigma is likely to spend $60 million to obtain a BMS portfolio of 15 drug brands. Rest of the funds raised by the company will be spent to pare down debt, taking its gearing down to 29 percent from 41 percent.

Sigma’s earnings before interest, tax, depreciation and amortisation were down 4 percent to $99.1 million and earnings before interest and tax dropped 4.6 percent to $76.8 million. According to Mr. de Alwis, the healthcare business of the company have posted a $29.9 million worth of EBIT, which is 9.5 percent up, on revenue of $1.2 billion, up 6.9 percent. The company is expected to pay out a fully franked dividend of 3c per share, the same amount it paid a year ago. The company saw a 1c drop in its shares closing the week at $1.06.