China BCT Pharmacy Group records 35% third quarter profit growth
Pharmacy group China BCT (OTCBB:CNBI) posted a 35% rise in its third quarter profits, driven by significant revenue growth in its pharmacy distribution segment, the company said Wednesday.
In the third quarter, the company, which works in the distribution, retailing and manufacturing of pharmaceutical products in Guangxi province, China, recorded net income of $6.9 million, or $0.18 per diluted share, up from $5.1 million, or $0.16 per share, in the year-ago quarter.
Revenue during the period grew 55% year-over-year to $52.5 million, primarily driven by stronger sales from the company's pharmaceutical distribution segment and incremental sales from acquired or newly built retail pharmacies, it said.
Pharmaceutical distribution sales increased 65.5% year-over-year to $38.1 million, amounting to nearly 73% of total revenue. The company said this jump reflects the new business it received with clinics and healthcare centres under China's Basic Drugs Catalog program.
Retail pharmacy sales improved 34% to $11.5 million during the quarter, as the company added 72 new stores after September 30, 2009. Manufacturing pharmacy revenue was up as well by 28.4% to $2.9 million.
In September this year, China BCT said it signed expanded three-year pharmaceutical distribution relationships with Liuzhou People's Hospital and Liuzhou Worker's Hospital in Guangxi.
These two contracts, combined with the company's exclusive contract with Liujiang County Chinese Medicine Hospital signed in June, are expected to contribute additional annual revenue of approximately $7 million, beginning in the fourth quarter of this year, the company said.
Operating expenses were up a whopping 95% to $3.8 million on increased sales and marketing campaigns.
"By building a larger and stronger retail network, we expect to gain economies of scale and build incremental synergies as we vertically integrate retail with pharmaceutical distribution and manufacturing," said chairman and CEO Hui Tian Tang.
"As we execute in each of our business segments, our goal is to deliver shareholder value while playing an important role in China's rapidly growing healthcare industry."
The company, which operates 173 directly owned retail stores in Guangxi province, was up more than 1% on Wednesday, trading at $3.3 as of 11:19am ET.
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