Oriola Corporation insider information 19 December 2019 at 7 p.m.
Inventory and intangible assets write down is affecting Oriola’s fourth quarter result significantly
Oriola Corporation’s last quarter and full year 2019 result will be affected by errors found in inventory values in Sweden in BA Consumer as well as by impairment of intangible assets. Oriola has decided to accelerate the renewal of the Swedish pharmacy online shop IT system to enhance competitiveness and to optimise omnichannel sales. This will result in impairment of intangible assets, and Oriola will book this write down as an adjusting item in fourth quarter result.
Total value of impairments for 2019 result is estimated to be EUR 5 million of which EUR 3 million will be treated as adjusting item. In addition to this, inventory valuation errors related to years 2016-2018 will be adjusted by approximately EUR 4 million and will be corrected to previous year’s result and retained earnings.
Challenges in operating environment announced by Oriola on 19 June 2019 have continued and are still affecting the company’s result. Due to the above mentioned and impairments, the adjusted EBIT for fourth quarter of 2019 is expected to be lower than estimated.
Oriola is repeating the guidance given in third quarter interim report in October 25, 2019: The adjusted EBIT on a constant currency basis is estimated to decrease from the 2018 level.
The 2018 adjusted EBIT from continuing operations was EUR 36.9 million.
The Consumer business area offers products and services for health and wellbeing for customers through Kronans Apotek, the third largest pharmacy chain in Sweden.
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