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Sales

As the unaudited stand-alone Income Statement shows, in the January - September 2024 period sales reached MKD 9,997,468,062 which is an increase of 9% compared to the same period last year. The total consolidated sales reached MKD 14,236,125,924 which is an increase of 14% compared to the same period last year.

Sales by region and country

Consolidated sales on the domestic market increased by 20% while the total consolidated export of the company grew by 12%. By representing renowned global pharmaceutical manufacturers, the company takes active part in providing the latest rare and specialized treatments, whereby as a proven public healthcare partner, it significantly supports the national healthcare system. Despite the limited profitability of these programs, they have considerably increased the domestic market share in total consolidated sales. 32% of the total consolidated sales were realized on the domestic market, while foreign markets account for 68%. The breakdown by region shows that South-East Europe countries took 27% share of the sales, 21% of the sales went to the countries of Western Europe (EU and EFTA), Eastern Europe (CIS, UA…) took a 19% share, while other markets account for 1% of the total consolidated sales.

Sales in Cyprus experienced the highest growth, increasing by a factor of 36, followed by Georgia where sales grew 2.5-fold, Great Britain with a 2.4-fold increase; and Lithuania, where sales doubled. Following next is Ukraine with an increase of 80%, then Chile 78%, Jordan 27%, Armenia 19%, Albania 18%, the USA 16%, Croatia 14%, Bosnia and Herzegovina 11%, Montenegro 10%, Slovenia 9%, etc.

Sales by product group

Broken down by product group, the highest share of the total consolidated sales belongs to the Pharmaceuticals segment with 90%, more specifically, antibiotics account for 27%, OTC products 18%, neurological products 12%, cardiovascular products 11%, etc. The Chemistry, Cosmetics and Botanicals segment has a share of 10% of the total consolidated sales, or more precisely Chemistry 2%, Cosmetics 7% and Botanicals 1%. Total sales are up in the Pharmaceuticals, Cosmetics, and Botanicals profit centers, while in Chemistry there is a decrease compared to the same period in 2023. The Pharmaceuticals segment is up by 15%, Chemistry is down by 3%, Cosmetics is up by 7% and Botanicals is up by 11%.

Capital expenditures

Committed to continuous modernization and expanding manufacturing capacities, volume, and product range, ALKALOID AD Skopje in 2024 has completed its most substantial investment venture in the past two decades. This project involved the establishment of an advanced facility for manufacturing solid pharmaceutical forms, known as "Tablet Department 2.0," along with its accompanying technical infrastructure. The new technical and technological infrastructure, designed to more than double the production volume and enhance the flexibility of solid pharmaceutical form manufacturing, spans 6,200 square meters, encompassing both production and technical facilities. ALKALOID invested a total of EUR 19.4 million in this endeavor.

We made another strategic investment in the first half of this year. A new production line for manufacturing and packaging wet wipes was installed in PC Cosmetics, worth EUR 1.7 million. The new manufacturing equipment for wet wipes production has a capacity of 120 pieces per minute and is complemented by fully automated packaging lines. Consequently, we have doubled our manufacturing capacity for wet wipes and expanded the range of products that we can manufacture and package.

In the January – September 2024 period a total of MKD 1,017,349 has been invested in fixed assets.

Foreign investments

In 2024, ALKALOID AD Skopje registered a new company in Croatia, named ALKALOID PHARMA INTERNATIONAL DOO Zagreb. As 68% of the company's production goes for exports, being present in the EU markets and expanding to new ones is exceptionally important. Thus, the newly opened legal entity is the eighth established in an EU member country.

The company also established a new capital-related company in Kazakhstan, under the name Alkaloid Kazakhstan LLC, marking the company’s first subsidiary in Asia. This new entity presents a tremendous opportunity to capitalize on the immense potential of selling pharmaceutical products in this market, valued at nearly 2 billion euros annually. With a population of 19.6 million, Kazakhstan has the strongest economy in Central Asia. Alkaloid’s portfolio in Kazakhstan will initially consist of antibiotics and nutritional supplements for pregnant women. The company’s future plans involve broadening its product assortment and presence into other countries within this region of interest. The Kazakhstan subsidiary, based in the city of Almaty, marks Alkaloid’s 26th capital-related company.

As an international generic pharmaceutical company, ALKALOID AD Skopje aims to be present in all segments of the industry and provide healthcare systems and patients with access to a wide range of medications at affordable prices. In addition to offering generic medicines, ALKALOID AD Skopje has set a strategic objective to introduce biosimilar drugs to the market. To capitalize on this growing business segment in the pharmaceutical industry, ALKALOID AD has decided to invest in the South Korean company Rophibio by acquiring a minority stake, which was facilitated by the recapitalization of its newly established subsidiary, ALKALOID Pharma International in Croatia. This investment in South Korea amounting to 1 million USD will provide ALKALOID AD with an ownership share in the company and the right of first refusal when licensing products in its operating regions. Considering the market potential and the expertise of the Rophibio team, ALKALOID AD has decided to invest in this research and development company, which is currently in the advanced stages of developing biosimilar drugs.

Innovation

In recent years, ALKALOID has embarked on a process of redesigning existing generic pharmaceutical products for new indications. The goal was to develop drugs with added value that address the treatment and fulfill the needs of individual or specific patient groups. Strategic investments aimed at modernizing the product portfolio resulted in the successful development of ALKALOID's first patented value-added drug. This drug is primarily designed to treat reflux esophagitis and gastroesophageal reflux disease (GERD). Proton pump inhibitors, including Omeprazole, are the preferred medications for treating reflux esophagitis and GERD. These medications are typically available in the form of gastro-resistant tablets and capsules, as well as powder for dissolution. In a groundbreaking discovery, ALKALOID has developed ready-to-use liquid Omeprazole for the first time in history.

ALKALOID obtained the first international value-added medicine (VAM) patent for the Omeprazole peroral solution. The first marketing authorizations for this groundbreaking medication have been granted for the Macedonian, the UK, Ireland, the Netherlands, Portugal, Hungary, Romania, Slovenia, Croatia, Bulgaria, and Kosovo markets. Registration processes are underway for the other European countries and European Union markets, with the anticipation of obtaining marketing authorizations and subsequent product launch.

Operating results

Stand-alone earnings before interest, taxes, depreciation and amortization (EBITDA), which amount to MKD 2,295,936,326 marked an increase of roughly 9%, whereas net profits rose by 10% to MKD 1,435,396,154.

Consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) reached MKD 2,339,118,233 - an increase of 5%, while net consolidated profit of MKD 1,381,386,743 grew by 7%.

In its operations ALKALOID AD Skopje engaged more than 1,000 domestic suppliers.

Employees

In the January – September 2024 period, ALKALOID AD Skopje recruited 222 new employees in the R.N. Macedonia. In March 2024 the Management Board of ALKALOID AD Skopje decided to approve and pay holiday allowance to its employees in the amount of MKD 40,500 net. The ALKALOID Group has 3,023 employees, of which 2,298 in the country and 725 in its subsidiaries and representative offices abroad.

Shares

The shares of ALKALOID AD Skopje have been listed since 2002 and stand as one of the most traded and most liquid shares on the Macedonian Stock Exchange. The price of ALKALOID AD Skopje shares ranged from MKD 18,151.00 to MKD 22,700.00 in the January-September 2024 period, with an average of MKD 20,751.37 per share. The share price movement followed the average annual growth trend, driven by the consistent and transparent reporting of the company’s positive performance, favorable public opinion, confidence in our products and management, and the general upward trend in global and regional stock exchanges. On 30.09.2024, 5,766 individuals and companies held ALKALOID AD Skopje shares, while its market capitalization was MKD 31.9 billion.

On April 1st 2024, the Annual Shareholders’ Assembly approved the calculation and payment of gross dividend for 2023 in the amount of MKD 772,931 thousand. In accordance with the dividend calendar as of May 2024 the company has started paying the dividend in the amount of MKD 540 gross i.e. 486 net-dividend for one ordinary share. The dividend per share for 2023 is 10.2% higher than the dividend paid per share for 2022.

2024 Business Plan

The 2024 Business Plan, adopted by the Management Board of ALKALOID AD Skopje at its December 27^th, 2023 meeting, anticipates investment of around 10% of the consolidated revenue in tangible and intangible assets, growth in consolidated sales of 10% compared to sales in 2023, and growth in pre-tax consolidated profit of 7% in comparison to 2023.

The 2024 Business Plan is based on the expectations, forecasts and opportunities on the existing and new markets and products available to the Company at the time of drafting the plan. Circumstances and events in 2024 may vary from those taken into account in the Business Plan and so may actual results.

Expectations for the upcoming period

It is highly likely that the trend of operating within challenging economic conditions, which has prevailed in recent years, will persist into 2024. Key challenges such as inflation and increasing interest rates are anticipated to maintain their current levels or even experience slight declines. Additionally, global security crises further complicate the economic landscape, introducing uncertainties that may impact energy prices, disrupt supply chains, and affect the availability of certain materials.

We expect to sustain our growth trajectory in 2024. Building upon our ongoing investments in new manufacturing facilities, equipment, and research and development endeavours, we aim to fortify our competitive portfolio and capitalize on market expansion opportunities. In pursuit of these objectives, we will continue to recruit talent domestically and internationally, while steadfastly investing in enhancing the knowledge and skills of our workforce. In accordance with the results so far, under unchanged conditions in the markets in which ALKALOID operates, the company's management estimates exceeding the planned consolidated sales for 2024 and for the first time reaching an amount of over MKD 18.5 billion.