Adcock shows hefty loss as restructuring bites

(Shutterstock)
(Shutterstock)

Johannesburg - SA's number two drugmaker Adcock Ingram [JSE:AIP] fell to a hefty loss in the first nine months of its financial year on Thursday, hit by weak demand and write-downs related to its restructuring drive.

Adcock, which is in the middle of a turnaround plan led by top shareholder Bidvest, posted a headline loss of 179.5 cents a share in the nine months to end-June, from a profit of 271.7c a year earlier.

Adcock said it took R281.9m in write-downs - including some on the value of drug inventory and plants - following a review of the business launched by Bidvest.

Adcock had underperformed rivals such as Aspen Pharmacare as it grapples with slowing sales, over-reliance on a heavily regulated home market and poor distribution network.

Bidvest, a vast conglomerate that spans shipping to catering, acquired its 34.5% stake in Adcock early this year, blocking a $1.2bn takeover bid from Chile's CFR Pharmaceuticals.

Bidvest is looking to turn Adcock around by reorganising it to match its own decentralised model.

A document from South Africa's competition regulator seen by Reuters this month said Bidvest intended to increase its stake to more than 50%.

Bidvest has said it has yet to make a decision on whether or not to make an offer to shareholders.

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