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BEXIMCO PHARMACEUTICALS LTD.

31st July, 2008

Half Year Results - 2008

Beximco Pharmaceuticals Limited ('BPL' or 'Company'; AIM Symbol: BXP) today announces its results for the half year to 30th June 2008.

Highlights 

Products and Markets

• Received marketing authorization from 'Instituto de Salud Publica de Chile' (Drug Regulatory authority in Chile) for a number of products. With this approval BPL has become the first Bangladeshi pharmaceutical company to obtain product registration in any Latin American country. Product export to commence soon.

• Received marketing authorization for 24 new products in international markets.

• Afghanistan, Solomon Islands and Kiribati have become new international market destinations.

• Signed distribution agreements in four new international markets.

• Signed a Long Term Arrangement with the Global Supply Division of UNICEF (Denmark) to supply 60,000 units CFC-free metered dose inhaler product over a two-year contract period.

 

• The first company in Bangladesh to launch a specially designed innovative 'gum' formulation incorporating Ascorbic acid or vitamin C for use by children.. 

Corporate

• Facility installation has been completed for SVP (Small Volume Parenterals), Opthalmics and Nebulizer solution projects. The commercial production of these three new product lines will commence towards the end of the first quarter 2009. 

• The addition of three more lines in the new Oral Solid Dosage (OSD) facility was kept on hold for completion of the TGA (Therapeutic Goods Administration) Australia, inspection which we are now expediting. At least one of these three lines will be installed and fully operable before the end of 2008.

• 4 MW [Mega Watt] Power Plant Project is now complete and operational. 

• BPL is one of the few pharmaceutical companies in the world that are currently producing technology driven CFC-free HFA Metered Dose Inhalers (MDIs). Based on the very encouraging responses for the MDI products, particularly the CFC-free MDIs from Central and Latin America and Middle East countries, BPL has undertaken a project to set up a 10 million unit capacity plant beside the existing MDI facility. The project is now in progress. 

• As the costs of pharmaceutical raw materials and excipients are rising sharply at a global level and as this has a significant impact on the bottom line, the Company is proactively dealing with the Bangladeshi drug regulatory authority to adjust prices for certain products. The Company is also reviewing prices for all international markets to maintain and improve on the bottom lines.

• Banking related issues have been resolved. The Letter of Credit limit has been increased from Tk. 250 million to Tk. 500 million. Cash Credit Limit has also been increased from Tk. 570 million to Tk. 930 million. We are further negotiating for additional working capital funding to support export growth beyond 2009. 

• BPL has received approval (GMP Clearance) from the Therapeutic Goods Administration (TGA), Australia for its Metered Dose Inhaler & Spray and new Oral Solid Dosage (Tablet, Capsule) manufacturing facilities. BPL is the first Bangladeshi company to receive this regulatory approval of TGA, Australia through a stringent facility audit process. Under Mutual Recognition Agreements (MRA), TGA's Certificate of GMP Compliance is recognized by over 20 developed countries including Austria, Belgium, Canada, Denmark, France, Germany, Ireland, Italy, Netherlands, Norway, Spain, Sweden, Switzerland, and the UK.

• The joint inspection committee of the Ministry of Health of Gulf Cooperation Council (GCC) countries has recently audited the manufacturing facilities of BPL. The GCC is considered as one of the most active trade blocs in the world and the member states are Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. BPL will commence exporting medicines to this region (total pharmaceutical market valued at over US $4 billion) after receiving approvals from the Executive Board of the Health Ministers' Council for Cooperation Council States, which the Company expects to receive during the third quarter of 2008.

Financial

• Net sales decreased by 15.4% to Tk. 1659.3m (2007: Tk. 1960.4m)  

• Profit before tax decreased by 25.7% to Tk. 201.1m (2007: Tk. 270.6) 

• EPS decreased by 35.6% to Tk. 1.32 (2007: Tk. 2.05) 

Nazmul Hassan, CEO of Beximco Pharmaceuticals, commented:  

'We have now recovered from the banking-related issues that we faced throughout 2007 and during the first quarter of 2008. We have returned to the market strongly, rapidly improving the product supply issues. We see 2008 as a very challenging year for us in terms of ensuring product supply, ongoing project completion and international market expansion. We believe that we are on target to meet these challenges. Finally, receiving TGA, Australia's approval of our new oral solid dosage facility and inhaler facility is a major breakthrough for us in our goal to becoming a global pharmaceutical company'.

The half yearly accounts can be viewed at the Company's website: www.beximcopharma.com

For further enquiries please contact:

 

Beximco Pharma

Nazmul Hassan, CEO

Tel: +880 2 861 9151, ext.2080

 

Libertas Capital

Aamir Quraishi/ Andrew Hardy

Tel: +44 (0)20 7569 9650

 

Financial Dynamics

David Yates / Jonathan Birt

Tel: +44 (0)20 7269 7169

 

Notes to Editors

 

About Beximco Pharmaceuticals Limited

Founded in 1976 and based in Dhaka, Bangladesh, BPL manufactures and sells generic pharmaceutical formulation products, active pharmaceutical ingredients and intravenous fluids. The Company also manufactures and markets its own branded generics for almost all diseases. The Company also undertakes contract manufacturing for multinational pharmaceutical companies. The Company operates from a 20 acre site in Dhaka and currently employs over 2,400 staff.

The Company's products are sold to retail outlets, medical institutions and other pharmaceutical manufacturers in Bangladesh, in regional markets such as Sri Lanka, Nepal, Bhutan, Vietnam, Cambodia and Myanmar and in other markets overseas, principally in East Africa, Pacific Island and Central American countries and South East Asia, including Singapore and Hong Kong.

END

BEXIMCO PHARMACEUTICALS LTD.

CHIEF EXECUTIVE OFFICER'S STATEMENT

Dear Shareholders,

We are pleased to publish the un-audited financial results for the half-year ending on June 30, 2008.

During the period the company achieved net sales of Tk. 1,659.3 million and pre-tax profit of Tk. 201.1 million as against Tk. 1,960.4 million and Tk. 270.6 million respectively of comparable period of the preceding financial year. The banking-related issues that we came across in 2007 were successfully negotiated by the end of 1st quarter of 2008. However, the continual effect of disruption in the supply chain persisted in most part of the period under review. With our banking problems being resolved, significant improvement have taken place in material and product availability since last month. We expect to achieve a normal product supply situation within third quarter of this year. You will be pleased to know that, despite product supply constraints, we have achieved 22.8% growth in export sales during the period under review. We have also entered into three new overseas markets namely Afghanistan, Solomon Islands and Kiribati, and have registered 24 new products in different international markets during the first half of the year.

Bangladesh economy is still struggling to get back to its expected pace. Inflation and the resulting price index significantly moved upward during this period. Drastic rises in the prices of essential commodities and significant increases in fuel prices has further deteriorated the situation.

The prices of pharmaceutical raw materials and excipients are rising sharply in the international markets. The improvement in the gross margin on comparable basis, as reported in this interim financial statement, is mainly due to the sales mix of relatively higher margin products in the current review period in comparison to the prior period. We are now proactively dealing with the local drug regulatory authority to adjust prices for some products. We are also reviewing prices for all our overseas markets to maintain and improve on the bottom line.

I am pleased to inform that we have received approval (GMP Clearance) from Therapeutic Goods Administration (TGA), Australia for new Oral Solid Dosage (tablet and capsule) and Metered Dose Inhaler & Spray manufacturing facilities. BPL is the first Bangladeshi company to receive this regulatory approval of TGA, Australia through a stringent facility audit process. This is incontestably a milestone achievement for us. We are also hopeful about the positive outcome of the audit carried out by the Joint Inspection Committee of the Ministry of Health of the Gulf Cooperation Council (GCC).

Credit Rating Information and Services Limited (CRISL) a Bangladeshi Company having Joint Venture with Rating Agency Malaysia Berhard, Malaysia and JCR-VIS Credit Company Limited, Pakistan has assigned A- (Pronounced as Single A minus) rating in the long term and ST-3 rating in the short term to BPL.

 

Nazmul Hassan

Chief Executive Officer

Balance Sheet (Unaudited)

As at 30th June, 2008

Amount in '000 BDT

	Notes	As at 30th June, 2008	As at 31st December, 2007	Growth %
ASSETS
Non-Current Assets		9,203,809 ______	9,029,643 ______	1.93 ______
Property, Plant and Equipment- Carrying Value	3	9,167,108	8,992,942	1.94
Investment in Shares		36,701 ______	36,701 ______	0.00 ______
Current Assets		3,118,973 ______	2,923,776 ______	6.68 ______
Inventories	4	1,753,902	1,652,480	6.14
Accounts Receivable		491,116	499,681	(1.71)
Loans, Advances and Deposits	5	735,344	685,916	7.21
Cash and Cash Equivalents	6	138,611 ______	85,699 ______	61.74 ______
TOTAL ASSETS	Tk.	12,322,782 ______	11,953,419 ______	3.09 ______
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' Equity		8,402,384 ______	8,250,940 ______	1.84 ______
Issued Share Capital		1,145,070	1,145,070	-
Reserves	7	3,916,693	3,916,693	-
Retained Earnings		3,340,621 ______	3,189,177 ______	4.75 ______
Non-Current Liabilities		1,860,370 ______	2,074,507 ______	(10.32) ______
Long Term Borrowing-Net off Current Maturity (Secured)	8 A	1,574,496	1,776,450	(11.37)
Liability for Gratuity & WPPF		240,171	246,705	(2.65)
Deferred Tax Liability		45,703 ______	51,352 ______	(11.00) ______
Current Liabilities and Provisions		2,060,028 ______	1,627,972 ______	26.54 ______
Short Term Borrowing		1,204,851	907,582	32.75
Long Term Borrowing-Current Maturity	8 B	476,547	343,604	38.69
Creditors and other Payables		248,231	271,814	(8.68)
Accrued Expenses		54,146	60,053	(9.84)
Dividend Payable		1,278	3,285	(61.10)
Income Tax Payable		74,975 ______	41,634 ______	80.08 ______
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	Tk.	12,322,782 ______	11,953,419 ______	3.09 ______

Profit and Loss Account (Unaudited)

For the Half-year ended 30th June, 2008

Amount in '000 BDT

	Notes	Half-year ended 30th June, 2008	Half-year ended 30th June, 2007	Growth %
Net Sales Revenue		1,659,337	1,960,408	(15.36)
Cost of Goods Sold	9	(886,772) ______	(1,080,357) ______	(17.92) ______
Gross Profit		772,565	880,051	(12.21)
Operating Expenses :		(455,800)	(514,853)	(11.47)
Administrative Expenses	10	(69,211)	(69,831)	(0.89)
Selling, Marketing and Distribution Expenses	11	(386,589)	(445,022)	(13.13)
Profit from Operations		316,765	365,198	(13.26)
Other Income		686	15,094	(95.46)
Finance Cost		(106,298) ______	(96,139) ______	10.57 ______
Profit Before Contribution to WPPF		211,153	284,153	(25.69)
Contribution to Workers' Profit Participation/ Welfare Funds		(10,055)	(13,531)	(25.69)
Profit Before Tax		201,098 ______	270,622 ______	(25.69) ______
Income Tax		(49,653) ______	(35,872) ______	38.42 ______
Profit After Tax		151,445 ______	234,750 ______	(35.49) ______
Earnings Per Share (EPS)		1.32	2.05	(35.61)
Number of shares used to compute EPS		114,507,043 ______	114,507,043 ______

Statement of Changes in Equity (Unaudited)

For the Half-year ended 30th June, 2008

Amount in '000 BDT

		Half-year ended 30th June, 2008	Half-year ended 30th June, 2007
Shareholders Equity at Beginning of Period		8,250,939	7,949,920
Net Profit for the period		151,445 ______	234,750 ______
Shareholders Equity at the end of Period	Tk.	8,402,384 ______	8,184,670 ______

Cash Flow Statement (Unaudited)

For the Half-year ended 30th June, 2008

Amount in '000 BDT

		Half-year ended 30th June, 2008	Half-year ended 30th June, 2007	Growth %
Cash Flows from Operating Activities :
Cash Receipts from Customers and Others		1,668,588	1,787,026	(6.63)
Cash Paid to Suppliers and Employees		(1,469,045)	(1,595,425)	(7.92)
Cash Generated from Operations		199,543	191,601	4.15
Interest Paid		(106,298)	(96,139)	10.57
Income Tax Paid		(21,961) ______	(17,498) ______	25.51 ______
Net cash Generated from Operating Activities		71,284	77,964	(8.57)
Cash Flows from Investing Activities :
Acquisition of Property, Plant and Equipment (net of IDCP)		(158,324)	(262,325)	(39.65)
Disposal of Property, Plant and Equipment		-	571	(100.00)
Net cash Used in Investing Activities		(158,324)	(261,754)	(39.51)
Cash Flows from Financing Activities :
Net (Decrease)/Increase in Long Term Borrowings		(155,310)	(28,819)	438.92
Net (Decrease) / Increase in Short Term Borrowings		297,269	(361,542)	(182.22)
Dividend Paid		(2,007)	(2,699)	(25.60)
Net cash Generated from Financing Activities		139,952 ______	(393,060) ______	(135.61) ______
Increase/(Decrease) in Cash and Cash Equivalents		52,912	(576,850)	(109.17)
Cash and Cash Equivalents at Beginning of Period		85,699 ______	581,099 ______	(85.25) ______
Cash and Cash Equivalents at End of Period	Tk.	138,611 ______	4,249 ______	3,162.20 ______

Selected Notes to the Financial Statements (Unaudited) For the Period ended 30th June, 2008

Amount in '000 BDT

1. Status and Activities

Beximco Pharmaceuticals Limited (BPL/the Company) is a public company incorporated in Bangladesh in 1976. The company is engaged in manufacturing and marketing of Pharmaceuticals Finished Formulation Products, Active Pharmaceutical Ingredients (APIs) and life saving Intravenous Fluids which it sells in the local as well as international markets. The company also provides contract manufacturing services. . The shares of the company are traded in Dhaka and Chittagong Stock Exchanges of Bangladesh and also in the AIM of London Stock Exchange.

2. Principal Accounting Policies

Basis of Preparation of Financial Statements

These interim financial statements should be read in conjunction with the Financial Statements for the year ended December 31, 2007 (hereafter referred to as the 'Annual Financial Statements'), as they provide an update to previously reported information.

 

The accounting policies used are consistent with those used in the Annual Financial Statements. The financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRSs) including International Accounting Standards (IASs). The presentation of the Interim Financial Statements is consistent with the Annual Financial Statements. Where necessary, the comparatives have been reclassified or extended from the half yearly report of 2007 to take into account any presentational changes made in the Annual Financial Statements or in the half yearly report 2008. The preparation of the Interim Financial Statements requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities at the date of the Interim Financial Statements. If in the future such estimates and assumptions, which are based on management's best judgment at the date of the Interim Financial Statements, deviate from the actual, the original estimates and assumptions will be modified as appropriate in the period in which the circumstances change

3. Property, Plant and Equipment

		As at 30 Jun. 2008	As at 31 Dec. 2007
Cost
Land		1,238,587	1,236,071
Building and Other Constructions		1,047,308	1,047,308
Plant & Machinery		1,465,994	1,448,468
Furniture & Fixture		66,789	65,120
Transport & Vehicle		126,377	126,377
Office Equipment		234,302	228,591
		4,179,357	4,151,935
Less :Accumulated Depreciation		(1,593,545)	(1,523,088)
Written Down Value		2,585,812	2,628,847
Capital Work in Progress		6,581,296 ______	6,364,095 ______
Carring Value	Tk.	9,167,108 ______	8,992,942 ______

4. Inventories

		As at 30 Jun. 2008	As at 31 Dec. 2007
Finished Goods		400,849	331,438
Raw and Packing Material (Including WIP and Transit)		1,143,270	1,117,642
Spares & Others		209,783 ______	203,400 ______
	Tk.	1,753,902 ______	1,652,480 ______

5. Loans, Advances and Deposits

		As at 30 Jun. 2008	As at 31 Dec. 2007
Motor Cycle Loan		62,603	62,295
Security and Other Deposits		31,990	34,845
Prepaid VAT		124,031	103,794
Advance for Capital Expenditure		156,320	158,660
Advance for Expense		36,910	27,952
Salary Advance		42,544	27,672
Advance to material Suppliers including C &F Agents		208,389	205,833
Others		72,557 ______	64,865 ______
	Tk.	735,344 ______	685,916 ______

6. Cash and Cash Equivalents

		As at 30 Jun. 2008	As at 31 Dec. 2007
Cash In Hand		3,254	2,140
Cash At Banks		135,357 ______	83,559 ______
	Tk.	138,611 ______	85,699 ______

7. Reserves

		As at 30 Jun. 2008	As at 31 Dec. 2007
Share Premium		1,489,750	1,489,750
Excess of Issue Price over Face Value of GDRs		1,689,637	1,689,637
Capital Reserve		294,951	294,951
Tax-Holiday Reserve		442,355 ______	442,355 ______
	Tk.	3,916,693 ______	3,916,693 ______

8. Long Term Borrowing

		As at 30 Jun. 2008	As at 31 Dec. 2007
A. Non Current Maturity
Project Loan		1,380,311	1,516,920
Interest and PAD Block		173,579	223,811
Obligation Under Finance lease		20,606 ______	35,719 ______
	Tk.	1,574,496 ______	1,776,450 ______
B. Current Maturity
Project Loan		293,394	152,025
Interest and PAD Block		154,560	159,478
Obligation Under Finance lease		28,593 ______	32,101 ______
	Tk.	476,547 ______	343,604 ______

9. Cost of Goods Sold

		Half-year ended 30th June, 2008	Half-year ended 30th June, 2007
Raw and Packing Material		698,057	884,137
Factory Overhead		126,008	133,682
Depreciation		62,707 ______	62,538 ______
	Tk.	886,772 ______	1,080,357 ______

10. Administrative Expenses

		Half-year ended 30th June, 2008	Half-year ended 30th June, 2007
Salary & Allowances		40,221	37,473
Fuel, Repairs & Office Maintenance		4,726	2,990
Traveling & Conveyance		4,770	4,995
AGM and Company Secretarial Exp.		6,247	10,959
Other Expenses		10,429	10,389
Depreciation		2,818 ______	3,025 ______
	Tk.	69,211 ______	69,831 ______

11. Selling, Marketing and Distribution Expenses

		Half-year ended 30th June, 2008	Half-year ended 30th June, 2007
Salary & Allowances		136,280	139,860
Traveling & Conveyance		69,749	74,652
Market Research & New Products		7,526	10,641
Promotional Expenses including Sample & Literature		91,263	119,569
Delivery Commission		47,349	57,929
Depreciation		4,932	5,015
Other Expenses		29,490 ______	37,356 ______
	Tk.	386,589 ______	445,022 ______

12. Dividend for 2007

The Board of Directors of the company has proposed 5% cash and 10% stock dividend for the year 2007 which is subject to approval in the annual general meeting to be held on August 21, 2008. The company consistently follows the policy of recognising proposed dividend after its approval by the shareholders in the annual general meeting. Hence, the proposed dividend for 2007 has not been accounted for in this interim financial statements.

ENDIR SDASIFSASESW