Podravka Records Excellent Business Results

Lauren Simmonds

Good news for Podravka.

At a meeting held yesterday, Podravka confirmed that they were very satisfied with the unaudited results of the Podravka Group’s business, especially given the fact that positive trends in the second quarter continued at all levels.

As Poslovni Dnevnik writes on the 23rd of July, 2018, this is the best operating result and the highest operating profit of the first half of any year in Podravka’s very long history, and it’s worth mentioning that the results themselves are as such owing to organic growth without any extraordinary measures having been taken, which further confirms Podravka’s legitimate impressive performance in the first half of this year.

Net profit for the Podravka Group for the first half of this year stood at a massive 120.7 million kuna, which represents a significant increase compared to the comparative period last year when just 24.8 million kuna in profits were realised. Growth in sales of profitable assortments coupled with simultaneous control of operating costs resulted in very welcome double-digit profitability growth at all levels of business.

Podravka Group’s sales revenues amounted to 2,035.1 million kuna, representing considerable growth of 4.3 percent in comparison to the same period last year. Sales growth was largely influenced by sales growth in the food segment due to stronger sales and marketing activities, as well as the expansion of distribution of individual categories within that segment.

The food segment recorded 1,602.2 million kuna in sales revenue, an increase of 3.7 percent compared to the same comparative period last year, and had there been no impact on exchange rate differences, it is estimated that it would have been around 4.5 percent higher.

Within the aforementioned segment, all business programs recorded sales growth and individual growth of their own brands by 4.8 percent. The largest growth of 7 percent was recorded by the children’s food segment, desserts and snacks, followed by the Žito i Lagris business program, recording 6.5 percent growth, the culinary business program recording growth of 4.4 percent, and the Podravka food business program recording 4.2 percent growth.

The second segment within the Podravka Group, pharmaceuticals, generated sales of 432.8 million kuna, which is a 6.4 percent increase compared to the same period of the previous year, and just like with the food segment, without the impact of exchange rate differences, revenues would likely have been higher by 10.1 percent. Individual brands within the pharmaceutical segment grew by 7.1 percent, mainly due to the growth of sales on the Russian market and the expansion of distribution on Central European markets. It’s worth noting that prescription medicines saw a significant increase in sales revenue – 7.9 percent.

Regarding the realisation of the Podravka Group’s sales revenues by region, the largest relative increase of 10 percent was recorded in the Central European region and 9.7 percent in the Eastern European region. The Adria Region, as the most significant region within the Podravka Group, recorded significant growth in sales revenue of 3.4 percent.

Podravka’s share prices grew by 19.3 percent in the first half of 2018, while the domestic stock indexes Crobex and Crobex10 actually fell by 1.4 percent and 2.7 percent respectively.

The focus of Podravka Group’s management for the rest of this year will remain on organic growth, continued debt reduction, and the overall improving of internal efficiency.


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