API reports $35.1m loss

API reports $35.1m loss

Australian Pharmaceutical Industries (ASX:API) has reported a $35.1 million loss for the six months ending in February, after one-time items including significant costs from the Queensland floods.

The company recorded costs of $52.8 million from the floods, and API also blamed the disaster on a 1.1% decline in revenue from pharmacy sales.

But API said these costs and loss of profit are expected to be recovered in the second half of the year through insurance payouts.

The company also took a previously-announced $50 million pre-tax impairment charge as a result of a review of its financial guarantee program with pharmacists' banks, and incurred operating costs of $4.7 million from the closure of two distribution centres.

The non-disaster costs were partly incurred due to Pfizer's decision to end wholesaling arrangements in Australia, and the steps taken to mitigate the anticipated 10% to 15% reduction in annual revenues this decision was projected to cause for API.

Underlying profit adjusted for the non-recurring items was broadly flat, and the company's Priceline brand recorded retail sales growth of 3.1% year-on-year.

The company is projecting flat profit for the full year when adjusted for the effect of the $50 million impairment charge.

API CEO Stephen Rouche said the company had “responded effectively to the challenges it faced” during the half-year.

API shares grew 3.51% in Wednesday's trading to $0.295.

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