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Share Name | Share Symbol | Market | Type |
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Saratoga Investment Corp | NYSE:SAB | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 25.62 | 0 | 01:00:00 |
Quarterly Earnings Report
May 2, 2012
Distribution Sales to Institutional Clients Declined while Chile and Mexico Demonstrated Improved Performance
Financial Highlights:
Mexico City, Mexico, May 2, 2012. Grupo Casa Saba (SAB) (“Saba”, “GCS”, “the Company” or “the Group”) , one of the leading Mexican distributors of pharmaceutical products as well as health, beauty aids and consumer goods and publications and one of the most important pharmacy chains in Latin America, announces it’s consolidated financial and operating results for the first quarter of 2012.
In the first quarter of 2012, our distribution division registered a significant decrease in sales to some of our institutional clients, including ISSSTE. During the first quarter of 2011, in our Pharma, Health and Beauty division we were able to provide ISSSTE Hospital customers with over $700 million in products that were out-of-stock and this year were not requested by the institution. Given the amount, these sales could not be substituted for sales to other like or traditional clients. In addition, some of these clients were very focused, in general, on controlling their inventory levels and working capital. In terms of our collections, we maintained strict credit policies with all of our clients, which, together, contributed to the 13.2% decrease in sales in the Pharma, Health and Beauty division. We estimate that our efforts of generating profitable, low credit risk sales will enable us to improve our results in the medium term. As part of our strategy of focusing on those countries that we deem to be strategic (Mexico, Chile and Brazil) in our Retail Pharmacy division, on January 19, 2012 we concluded the negotiations to sell our Peruvian operations (Boticas Fasa) to Quitafex, S.A. As a result, we will no longer operate in Peru and the proceeds from the sale will be used to strengthen our balance sheet. In terms of our Retail Pharmacy division (without Peru), sales increased 3.9% as a result of the positive performance in Mexico (Benavides) and Chile (Farmacias Ahumada), whose sales rose by 7.8% and 5.5%, respectively. Our Brazilian operation somewhat offset this effect, however, given that its sales contracted due to the operational restructuring that is currently underway. Benavides and Farmacias Ahumada continued to apply their strategy of growth and strict cost and expenses controls, which translated into significant increases in terms of EBITDA. These increases were, however, partially offset by weaker results in Brazil. In both Chile and Mexico, our Retail Pharmacy division continued to implement its expansion strategy, increasing the average number of stores in operation by 6.0% and 3.5%, respectively, during the quarter. As a result, we were able to maintain our position as one of the leading pharmacy chains in Latin America, with more than 1,340 points-of-sale as of March 31, 2012. In Grupo Casa Saba, we will continue to focus on making ongoing improvements to our logistic and commercial operations in order to offer all of our clients a wide range of products at competitive prices. In our pharmacy network, we will also strive to offer the best, integrated health, beauty and consumer goods solutions. NET SALES Net sales for the quarter reached $12,035.3 million, a decrease of 5.8% versus the $12,782.2 million reported during the same period of 2011. This was the result of lower sales to ISSSTE Hospitals, the operative restructuring that is taking place in Brazil, the divestiture of our Peruvian operations and the fact that we continued to enforce strict credit policies in our distribution division. SALES BY DIVISON
As a result, the sales mix for the fourth quarter of 2012 was as follows:
During the first quarter of the year, Grupo Casa Saba’s gross income was $2,180.2 million pesos, primarily due to the improved gross margins in Chile, Brazil, Mexico (Farmacias ABC) and the Pharma, Health and Beauty distribution division. This result is related to our efforts at improving our customer service, product availability and commercial offers for our clients. Compared to the first quarter of 2011, the Group’s gross income decreased 1.6%. However, GCS’s 1Q2012 gross margin improved 79 b.p., to reach 18.12%. OPERATING EXPENSES GCS’s first quarter 2012 operating expenses rose by $66.1 million pesos, or 3.8% compared to the same period of the previous year. This increase was the result of the annual increase in the payroll as well as higher expenses in both our Government Pharma division and our Chilean and Mexican (Benavides) operations, due to their larger infrastructures. As a percentage of total sales, operating expenses represented 15.04% during the first quarter of 2012 compared to 13.64% during the same period of 2011. OPERATING INCOME Quarterly operating income for 1Q2012 was $370.2 million, lower than the $471.9 million reported in 1Q2011. This decline was the result of a lower gross income as well as the increase in expenses. As a result, the operating margin for the period was 3.08% versus an operating margin of 3.69% in 1Q2011. OPERATING INCOME PLUS DEPRECIATION AND AMORTIZATION Operating income plus depreciation and amortization for 1Q2012 was $479.0 million, a decrease of 18.0% compared to the $584.1 million reported during the first quarter of 2011. The operating income plus depreciation and amortization margin for the first quarter of 2012 was 4.0%. COMPREHENSIVE COST OF FINANCING (CCF) The Group’s CCF reached $263.1 million, 21.1% higher than the CCF reported during 1Q2011. This was primarily due to the increase in interest payments. NET DEBT The Company’s net debt as of March 31, 2012 was $9,356.2 million pesos. OTHER EXPENSES (INCOME) During the first quarter of 2012, the Company reported an income in the Other Expenses (Income) line item of $498.9 million, primarily as a result of the sale of our Peruvian operations. It is important to mention that the results listed in this line item are derived from activities outside of the company’s normal business operations and, as a result, they are not necessarily recurrent. TAX PROVISIONS Tax provisions for the first quarter of 2012 were $135.7 million pesos, 181% higher than the tax provision that were reported in 1Q2011. NET INCOME GCS’s net income was $470.4 million for the first quarter of 2012 versus $214.7 million during the first quarter of 2011. Consequently, the net margin for the period was 3.91%.
The 265.4 million shares issued by Grupo Casa Saba are listed on the Mexican Stock Exchange and its ADRs on the New York Stock Exchange, both under the symbol “SAB”. One ADR equals 10 ordinary shares.
As a precautionary note to investors, except for the historic information contained herein, certain topics discussed in this document constitute forward-looking statements. Such topics imply risks and uncertainties, including the economic conditions in Mexico and those countries in which Grupo Casa Saba operates, directly or indirectly, including the United States of America, Brazil and Chile, as well as variations in the value of the Mexican peso as compared with the currencies of the previously-mentioned countries.
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GRUPO CASA SABA, S.A.B. DE C.V. |
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Figures are expressed in thousands of Mexican pesos as of March 2012 | ||||||
Jan-Mar | Jan-Mar | Difference | ||||
Income Statement | 2011 | % of sales | 2012 | % of sales | $ | % |
NET SALES | 12,782,226 | 100.00% | 12,035,312 | 100.00% | -746,914 | (5.84%) |
COST OF SALES | 10,566,453 | 82.67% | 9,855,083 | 81.88% | -711,370 | (6.73%) |
Gross Profit | 2,215,773 | 17.33% | 2,180,229 | 18.12% | -35,544 | (1.60%) |
Operating Expenses | ||||||
Sales Expenses | 253,681 | 1.98% | 299,480 | 2.49% | 45,799 | 18.05% |
Administrative Expenses | 1,490,147 | 11.66% | 1,510,525 | 12.55% | 20,378 | 1.37% |
OPERATING EXPENSES | 1,743,828 | 13.64% | 1,810,005 | 15.04% | 66,177 | 3.79% |
Operating Income | 471,945 | 3.69% | 370,224 | 3.08% | -101,721 | (21.55%) |
COMPREHENSIVE COST OF FINANCING | ||||||
Interest Paid | 232,466 | 1.82% | 270,985 | 2.25% | 38,519 | 16.57% |
Interest (Earned) | -5,385 | (0.04%) | -33,901 | (0.28%) | -28,516 | 529.56% |
Exchange Loss (Gain) | -9,786 | (0.08%) | 25,973 | 0.22% | 35,759 |
NC |
Monetary Position (gain) | 0 | 0.00% | 0 | 0.00% | 0 | 0.00% |
Comprehensive Cost of Financing | 217,295 | 1.70% | 263,057 | 2.19% | 45,761 | 21.06% |
OTHER EXPENSES (INCOME), net | -8,346 | (0.07%) | -498,913 | (4.15%) | -490,567 | 5877.73% |
NET INCOME BEFORE TAXES | 262,996 | 2.06% | 606,080 | 5.04% | 343,084 | 130.45% |
PROVISIONS FOR: | ||||||
Income Tax | 50,843 | 0.40% | 135,705 | 1.13% | 84,862 | 166.91% |
Asset Tax | 0 | 0.00% | 0 | 0.00% | 0 | 0.00% |
Deferred Income Tax | -2,561 | (0.02%) | 0 | 0.00% | 2,561 |
NC
|
Profit sharing due | 0 | 0.00% | 0 | 0.00% | 0 | 0.00% |
Deferred Profit sharing due | 0 | 0.00% | 0 | 0.00% | 0 | 0.00% |
Total taxes | 48,281 | 0.38% | 135,705 | 1.13% | 87,424 | 181.07% |
Net Income Before Extraordinary Items | 214,715 | 1.68% | 470,374 | 3.91% | 255,658 | 119.07% |
Extraordinary Items (Income) | 0 | 0.00% | 0 | 0.00% | 0 | 0.00% |
Net Income | 214,715 | 1.68% | 470,374 | 3.91% | 255,658 | 119.07% |
Depreciation and Amortization |
112,165
|
0.88%
|
108,766
|
0.90%
|
-3,399
|
(3.03%)
|
Operating income plus Depreciation and Amortization |
584,110
|
4.57%
|
478,990
|
3.98%
|
-105,120
|
(18.00%)
|
Net Income corresponding to Minority Interest
|
-2,233 | 10,153 | ||||
ACCOUNT / SUBACCOUNT |
QUARTER CURRENT YEAR
|
CLOSE PRIOR YEAR
|
START PRIOR YEAR
|
AMOUNT
|
AMOUNT
|
AMOUNT
|
|
TOTAL ASSETS | 33,937,904,713 | 31,702,342,561 | 32,313,876,463 |
CURRENT ASSETS | 21,256,765,231 | 19,183,127,403 | 19,199,377,068 |
CASH AND CASH EQUIVALENTS | 2,716,760,631 | 2,279,258,346 | 1,290,465,662 |
CLIENTS | 7,788,895,536 | 7,174,200,277 | 7,816,039,665 |
ALLOWANCE FOR DOUBTFUL ACCOUNTS | -1,415,565,665 | -1,396,190,586 | -1,057,798,442 |
OTHER ACCOUNTS RECEIVABLES (NET) | 0 | 0 | 0 |
OTHER ACCOUNTS RECEIVABLES | 4,471,558,106 | 2,183,830,704 | 2,005,459,142 |
ALLOWANCE FOR DOUBTFUL ACCOUNTS | 0 | 0 | 0 |
INVENTORIES | 7,497,636,831 | 8,814,925,517 | 9,075,997,971 |
OTHERS | 197,479,792 | 127,103,146 | 69,213,070 |
NON CURRENT ASSTES | 12,681,139,482 | 12,519,215,158 | 13,114,499,395 |
ACCOUNTS RECEIVABLES (NET) | 0 | 0 | 0 |
INVESTMENTS | 0 | 0 | 0 |
INVESTMENT IN ASSOCIATES AND JOINT VENTURES | 53,868,717 | 55,180,000 | 51,177,000 |
PROPERTY | 2,336,881,750 | 2,355,388,838 | 2,341,262,287 |
MACHINARY AND INDUSTRIAL EQUIPMENT | 2,379,406,784 | 2,276,943,451 | 362,730,414 |
OTHER EQUIPMENTS | 1,909,816,105 | 1,994,937,616 | 3,869,497,140 |
ACCUMULATED DEPRECIATION | -3,498,910,273 | -3,608,905,210 | -4,433,177,962 |
CONSTRUCTION IN PROGRESS | 1,042,129 | 531,976 | 3,886,000 |
GOODWILL | 4,045,036,069 | 3,995,235,972 | 3,943,616,586 |
BRANDS | 2,611,455,846 | 2,650,393,484 | 90 |
RIGHTS AND LICENSING | 1,589,636,366 | 1,562,790,514 | 2,813,066,950 |
CONCESSIONS | 0 | 0 | 0 |
OTHER INTANGIBLE ASSETS | 4,089,977 | 4,089,977 | 19,100,399 |
DEFERRED TAX ASSETS | 0 | 0 | 0 |
OTHER CURRENT ASSETS | 1,215,736,373 | 1,199,116,867 | 3,775,845,002 |
ADVANCE PAYMENTS | 33,079,639 | 33,511,672 | 26,162,598 |
DEFERRED CHARGES (NET) | 0 | 0 | 341,332,890 |
OTHERS | 0 | 0 | 0 |
TOTAL LIABILITIES | -26,008,474,428 | -24,385,165,719 | -25,083,828,665 |
CURRENT LIABILITIES | -16,703,074,573 | -14,963,401,184 | -22,248,188,138 |
BANK CREDITS | -2,772,824,926 | -2,839,488,908 | -9,220,380,564 |
DEBT CREDITS | 0 | 0 | 0 |
OTHER COST BEARING LIABILITIES | 0 | 0 | 0 |
SUPPLIERS | -9,877,390,996 | -9,153,175,293 | -9,840,771,591 |
TAXES PAYABLE | -969,931,732 | -700,643,320 | -668,689,743 |
INCOME TAXES PAYABLE | 0 | 0 | 0 |
OTHER TAXES PAYABLE | 0 | 0 | 0 |
OTHER CURRENT LIABILITIES | -2,973,365,727 | -2,108,676,810 | -2,597,818,584 |
INTEREST PAYABLE | 0 | 0 | 0 |
DERIVATIVE FINANCIAL INSTRUMENTS | 0 | 0 | 0 |
DEFERRED INCOME | 0 | 0 | 0 |
EMPLOYEE BENEFITS | -109,561,191 | -161,416,853 | 79,472,344 |
NON CURRENT LIABILITIES | -9,305,399,855 | -9,421,764,535 | -2,835,640,527 |
BANK CREDITS | -9,300,173,064 | -9,505,714,859 | -2,289,346,000 |
DEBT CREDITS | 0 | 0 | 0 |
OTHER COST BEARING LIABILITIES | 0 | 0 | 0 |
DEFERRED TAX LIABILITIES | -5,226,791 | 83,950,324 | -546,294,527 |
SHAREHOLDERS' EQUITY | -7,929,430,285 | -7,317,176,842 | -7,230,047,798 |
SHAREHOLDERS' EQUITY PARTICIPATION OF THE CONTROLLER | 0 | 0 | 0 |
CAPITAL STOCK | -1,123,996,684 | -1,123,996,684 | -1,123,763,684 |
SHARES REPURCHASE | 0 | 0 | 0 |
PREMIUM ON ISSUANCE OF SHARES | -869,877,872 | -869,877,872 | -869,783,872 |
CONTRIBUTIONS FOR FUTURE CAPITAL INCREASES | 0 | 0 | 0 |
OTHER PAID-IN CAPITAL | 0 | 0 | 0 |
RETAINED EARNINGS (ACCUMULATED LOSSES) | 0 | 0 | 0 |
LEGAL RESERVE | -194,721,477 | -194,721,477 | -194,721,477 |
OTHER RESERVES | -1,062,200,200 | -1,062,200,200 | -1,062,296,200 |
PRIOR YEAR PROFIT | -6,600,540,300 | -6,790,831,151 | -5,935,239,834 |
PROFIT | -470,373,927 | -30,100,795 | -270,070,096 |
OTHER | 2,392,280,174 | 2,754,551,337 | 2,225,827,366 |
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