Operating Income and Operating Income plus Depreciation and Amortization
Increased 2.96% and 4.71%, Respectively
MEXICO CITY, Oct. 26 /PRNewswire-FirstCall/ -- Grupo Casa Saba ("Saba", "GCS", "the Company" or "the Group"), one of the leading Mexican distributors of pharmaceutical products, beauty aids, personal care and consumer goods, general merchandise, publications and other products announced today its consolidated financial and operating results for the third quarter of 2007.
(All figures are expressed in millions of pesos as of September 30, 2007. Comparisons are made with the same period of 2006, unless otherwise stated. Figures may vary due to rounding practices. "bp" stands for basis points.)
- Sales in the quarter amounted to $5,821.95 million
- Gross income rose 1.70%
- Gross margin in the quarter was 9.27%
- Operating expenses in the quarter increased by 0.93%
- Operating income increased by 2.96%
- Operating margin was 3.56%
- Net income was $184.21 million, an increase of 13.57%
- Cash and cash equivalents at the end of the period was $368.34 million
In the third quarter of 2007, GCS sales totaled $5,821.95 million, an increase of 0.33%.
Our divisions of Government Pharma and Health, Beauty, Consumer Goods, General Merchandise and Others grew by 7.15% and 2.98%, respectively, versus the third quarter of 2006. The growth in Health, Beauty, Consumer Goods, General Merchandise and Others division was due to greater volume sales, which offset a lower average unit price. In the case of the Government Pharma division, the increase in sales reflects a higher participation in bidding processes during the quarter.
Publications sales declined 1.53% due to lower prices, despite the fact that the number of items sold increased 10.10%. Sales in the Private Pharma division decreased marginally, by 0.13%, as a result of the competitive environment that GCS faced in the market.
The sales mix was not altered significantly. Private Pharma sales represented 83.27% of total sales, Government Pharma accounted for 3.46%, Health, Beauty, Consumer Goods, General Merchandise and Others totaled 9.33% and Publications the remaining 3.94%.
SALES BY DIVISION:
Sales in the Private Pharma division declined marginally, by 0.13%, as a result of the competitive environment that GCS faced in the marketplace, which had an unfavorable impact on the number of items sold during the quarter. Sales reached $4,847.80 million, representing 83.27% of the Group's total sales.
Sales of Government Pharma rose 7.15% to reach $201.63 million. This was mainly due to a higher participation in bidding processes during the quarter.
As a result, Government Pharma increased its participation with respect to total sales, from 3.24% in 3Q06 to 3.46% this quarter.
HEALTH, BEAUTY, CONSUMER GOODS, GENERAL MERCHANDISE AND OTHER
Sales in this division totaled $543.26 million during the quarter, an increase of 2.98% compared to 3Q06. The growth in this division was due to higher sales volume, which offset the decline in average unit prices during the period.
Citem's sales decreased 1.53% as a result of a lower average price and despite the fact that the number of items sold during the period increased approximately 10.10%.
Publications sales as a percentage of total sales declined from 4.01% in 3Q06 to 3.94% in the third quarter of 2007.
During the third quarter of the year, Grupo Casa Saba's gross income grew 1.70% to reach $539.76 million. Despite the highly competitive environment that has been discussed in previous reports, the Company was able to increase its gross margin to 9.27% during the third quarter of 2007, which compares favorably to the margin of 9.15% registered during the same period of 2006.
The Company's operating expenses rose marginally, by 0.93%, due to the 2.47% increase in sales expenses. Operating expenses as a percentage of sales grew from 5.67% in the third quarter of 2006 to 5.71% in 3Q07. However, Grupo Casa Saba continued to implement cost reduction programs and, as a result, was able to lower its administrative expenses.
Operating income grew by 2.96% to reach $207.40 million pesos. The operating margin was 3.56%, which is 9 b.p. higher than the margin that was registered during the same quarter of 2006.
OPERATING INCOME PLUS DEPRECIATION AND AMORTIZATION
Operating income plus depreciation and amortization for 3Q07 was $235.72 million, increasing 4.71% from the same period of the previous year. Depreciation for the quarter totaled $28.32 million, an increase of 19.60%.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents at the end of the third quarter of 2007 reached $368.34 million. The reduction in cash was due to higher working capital expenditures.
COMPREHENSIVE COST OF FINANCING
During the third quarter of 2007, GCS's comprehensive cost of financing of $13.33 million was higher than the $3.79 million of 3Q06, as a result of lower interest income.
OTHER EXPENSES (INCOME)
During the third quarter of 2007, the Company registered an income of $72.70 million in other expenses (income). This amount reflects the recovery of taxes from past periods.
It is worth noting that expenses (income) from this line item reflect activities that are distinct from the company's everyday business operations.
During the third quarter of 2007, tax provisions rose to $82.56 million. This increase was primarily the result of a reduction in deferred income taxes, related to the recovery of taxes from past periods.
GCS's net income during the third quarter of 2007 was $184.21 million, an increase of 13.57% versus the $162.19 million from 3Q06. The net margin for the period was 3.16%, which compares favorably to the 2.80% posted during the same period of 2006.
During the quarter, the Group's accounts receivable and inventory days increased by 3.8 and 6.1 days compared to 3Q06, to reach 62.1 and 57.4 days, respectively. Our accounts payable days also increased slightly, by 0.8 days, compared to 3Q06. Accounts payable days for the period were 48 days.
GRUPO CASA SABA IR Communications:
Rodrigo Echagaray, IRO Jesus Martinez Rojas
+52 (55) 5284-6672 +52 (55) 5644-1247
Alejandro Sadurni, CFO
|SOURCE Grupo Casa Saba, S.A.B. de C.V.|
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