Oriola-KD Corporation published the Interim Report for 1 January-31 March 2014 on 24 April at 8.30 a.m.
President and CEO Eero Hautaniemi's comments regarding the interim report:
"The Group's operating profit was positively supported by improved profitability from both segments in Pharmaceutical Trade Sweden. After closing the acquisition of Medstop in June 2013 we have since established ourselves as one of the main players in the Swedish pharmacy market. After the opening of a new pharmacy in March, we now have 300 pharmacies, in total, operating under the Kronans Apotek brand. Kronans Apotek's market share in the Swedish pharmacy market is at the moment approximately 21 per cent according to the company's estimate. The Swedish wholesale business' profitability was strengthened by the efficiency
programme that was started in the third quarter of 2013.
Russia's weakening economy and continued intense competition contributed negatively to our Russian businesses' net sales and profitability during the first quarter. Despite the efficiency measures already undertaken, the Russian wholesale business, in particular, was clearly behind the goals set. The continued slowdown in Russian economic growth weakened the purchasing power of the consumers and this negatively affected the Russian retail business' net sales and profitability during the first quarter. As a part of the profitability improvement actions initiated in 2013 in Russia, principal agreements which are
either commercially unprofitable or unfavourable for Oriola-KD have been re-negotiated. The restructuring initiatives affecting the Russian businesses during the first quarter will lead to the reduction of approximately 230 employees, corresponding to approximately EUR 2.5 million cost savings starting from 2015.
The investment project for the new distribution centre in Moscow is progressing as planned. Transfer of the operations is scheduled to begin in the last quarter in 2014. Full production capacity will be reached by the end of the first
quarter in 2015.
We have issued a EUR 40 million hybrid bond in 20 February 2014 in order to strengthen Oriola-KD's balance sheet."