Spanish pharmaceutical sector increased its exposure to banks by 11% in 2019

The Spanish pharmaceutical sector is increasing its bank debt. Pharmaceutical companies listed on the continuous market closed 2019 with a joint debt to banks of $8.8 million (€7.7 million), 11.1% more than in 2018 when they had a debt of $7.9 million (€6.9 million). The calculation includes data from six listed companies in the sector (Grifols, Almirall, Reig Jofre, Rovi, Pharma Mar, and Faes Farma). The joint profit of all these companies reached $980.7 million (€857.8 million) in 2019, an increase of 15% compared to 2018.

Grifols, the largest company in the sector, continues to be the company with the highest volume of debt to banking institutions, according to the company’s latest annual accounts. The Grifols family multinational accounts for 91% of the total debt, with $8 million (€7.1 million) (taking into account current and non-current liabilities), a figure 13.12% higher than the one recorded in 2018.

In fact, the Catalan pharmaceutical company completed a $6.6 billion (€5.8 billion) debt refinancing process last November. The company justified this decision as it “allows the financial infrastructure to be optimized and all the conditions to be significantly improved.” Grifols closed 2019 with a net profit of $714 million (€625 million), 4.8% more than a year earlier.

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Grifols is followed by Almirall and Pharma Mar in the ranking

Almirall is following Grifols in the ranking, with a debt of $563 million (€493 million). However, its liabilities to credit institutions have been reduced by 9.7% with respect to 2018, when it registered $623 million (€546 million) of commitments with banks.

The pharmaceutical company of the Gallardo family made a profit of $155 million (€136 million) in 2019, compared to $88 million (€77 million) in 2018, in contrast to a $347 million (€304 million) loss a year earlier. The multinational’s total sales improved by 12% to $1 billion (€908.4 million).

Pharma Mar completes the podium of the listed companies in the pharmaceutical sector with the largest debts to banks at the end of 2019, with $64.7 million (€56.6 million). Despite this, the company reduced its liabilities by 15.5%. The company increased its losses over the last year to $13 million (€11.4 million). These accounts do not include the collection of $200 million (€181 million) of the initial payment for the recent agreement signed with Jazz Pharmaceuticals in the U.S., valued at up to $1 billion (€919 million).

Last week, Pharma Mar announced that it is currently investigating a therapeutic compound that could treat the current outbreak of the coronavirus (Covid-19), with the aim of confirming its functioning in “a matter of weeks.”

Reig Jofre company’s debt has shot up 115% to $64.5 million (€56.5 million). The Catalan company reduced its profit to $5.6 million (€4.9 million) in 2019.  “This result is due to the effect of higher depreciation, investment in industrial technology and amortization of assets acquired in corporate operations,” said the pharmaceutical company. For its part, the group’s turnover was $228.5 million (€200.2 million), representing an increase of 11% compared to a year earlier.

Rovi is the company that has seen its debt to financial institutions increase the most, by exactly 129%, to $59.5 million (€52.1 million). However, the Madrid company was the one that most noticed the increase in its profitability in 2019. The laboratory obtained a profit of $44.8 million (€39.3 million) in 2019, a figure that more than doubles the result obtained in 2018 when it made a profit of $20.4 million (€17.9 million).

Faes Farma closes the ranking. The company has reduced its debt by 93% to $3.3 million (€2.89 million). Last year, the pharmaceutical company led by Mariano Ucar reached a profit of $73 million (€64 million), an increase of 24% compared to $58.8 million (€51.6 million) in 2018. Faes Farma highlights that this increase is above the expected range (a growth of between 17% and 22%). In 2019, the company completed a capital increase of $906,414 (€794,710), an item that comes from undistributed profits in the last financial year.

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(Featured image by  Markus Spiske via Unsplash)

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