Grupo Casa Saba Announces First Quarter 2008 Results

MEXICO CITY, April 28 /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, announces its consolidated financial and operating results for the first quarter of 2008.

Financial Highlights:

All figures are expressed in millions of Mexican pesos as of December 31, 2007. Comparisons are made with the same period of 2007, unless otherwise stated. Figures may vary due to rounding practices. "bp" stands for basis points)

NET SALES

During the first quarter, GCS's sales were $6,934.03 million, an increase of 15.33%.

Sales for our Private Pharma division grew 18.11% during the first quarter of 2008, due to the consolidation of investments made within the sector over the course of the past several months as well as an increase in our market share.

Sales in our Health, Beauty, Consumer Goods, General Merchandise and Others division rose 4.26% compared to the first quarter of 2007.

Sales in our Government Pharma division increased 15.97% due to a significant increase in the number of units sold. This was due, in part, to an increase in sales to PEMEX.

Publication sales decreased 18.72% as a result of lower unit sales. This decrease was due to the calendar effect of Holy Week as well as a reduction in sales of political content magazines.

The sales mix changed this quarter, primarily as a result of an increase in Private Pharma sales, which represented 86.01% of total sales (compared to 83.99% during the first quarter of 2007). Government Pharma accounted for 2.68% (versus 2.66% during the first quarter of 2007), Health, Beauty, Consumer Goods, General Merchandise and Other represented 8.62% (compared to 9.53% in the first quarter of 2007) and Publications made up the remaining 2.69% (versus 3.82% during the first quarter of 2007).

SALES BY DIVISION

PRIVATE PHARMA

Sales in our Private Pharma division rose 18.11% during the first quarter of 2008, as a result of the consolidation of investments that were made within the sector during the past several months and an increase in our market share. Sales reached $5,964.19 million and represented 86.01% of the Group's total sales.

GOVERNMENT PHARMA

Sales in our Government Pharma division rose 15.97% due to a significant increase in the number of units sold. This growth was partly the result of an increase in sales to PEMEX.

Government Pharma sales reached $185.50 million during 1Q08 and accounted for 2.68% of our total sales.

HEALTH, BEAUTY, CONSUMER GOODS, GENERAL MERCHANDISE AND OTHER

Sales in our Health, Beauty, Consumer Goods, General Merchandise and Other division rose 4.26% versus the first quarter of 2007. Total sales for this division reached $597.59 million.

PUBLICATIONS

Publication sales decreased 18.72% as a result of lower unit sales. This decrease was due to the calendar effect of Holy Week as well as a reduction in sales of political content magazines.

This division's participation as a percentage of total sales went from 3.82% in 1Q07 to 2.69% in the first quarter of 2008.

GROSS INCOME

During the first quarter of the year, Grupo Casa Saba's gross income rose 13.45% to reach $654.09 million. The company's gross margin decreased by 16 b.p., to 9.43%.

OPERATING EXPENSES

Operating expenses reached $394.13 million, an increase of 14.16% versus the first quarter of 2007. This was partly the result of the investments that were made over the course of the past several months. Operating expenses represented 5.68% of our total sales.

OPERATING INCOME

Operating income increased significantly, by 12.40%, to reach $259.95 million during the period. The operating margin was 3.75%, 10 b.p. lower than the 3.85% margin posted in the first quarter of 2007.

OPERATING INCOME PLUS DEPRECIATION AND AMORTIZATION

Operating income plus depreciation and amortization for 1Q08 was $276.87 million, an increase of 7.14% compared to the first quarter of 2007. Depreciation and amortization for the period was $16.91 million, 37.65% lower than in the first quarter of 2007, which caused this line item to be lower.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents at the end of the first quarter of 2008 was $178.03 million.

COMPREHENSIVE COST OF FINANCING

During the first quarter of 2008, GCS's comprehensive cost of financing (CCF) of $5.79 million was $2.19 million higher than the CCF registered during the first quarter of 2007.

OTHER EXPENSES (INCOME)

During the first quarter of 2008, the Company registered an income of $2.49 million in other expenses (income). The expenses (income) from this line item were derived from activities that are distinct from the company's everyday business operations.

TAX PROVISIONS

During the first quarter, tax provisions were $65.03 million. These provisions included $100.70 million in current income tax and -$35.66 million in deferred income tax.

NET INCOME

GCS's net income for the first quarter was $191.61 million, a significant increase of 13.02% versus the first quarter of 2007. The net margin for the period was 2.76%.

WORKING CAPITAL

SOURCE Grupo Casa Saba

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