Farmexim, one of the top distributors on the local pharmaceuticals market, has posted net profit of 2.4 million euros, after the company originally targeted a net gain of 1.1 million euros.
"We are not trying to secure a specific market share. We want healthy sales, which means sales that derive a profit. We closed 2006 with a 7.45% market share, and by the end of this year intend to cover a market share of 9-10%. However, there may be situations where the profit may fluctuate or drop. If this happens, we will cut back on sales," stated Ovidiu Buluc, general manager of Farmexim.
Last year, the company chose to reinvest its entire reported profit, although the other shareholders had originally proposed to distribute the dividends, during a General Meeting of Shareholders. For this year, Farmexim has budgeted a profit margin of over 2%.
"One has to always find a balance between a sales increase and achieving a satisfactory profit margin. At the end of 2006, we significantly reduced our discounts to domestic clients, which slowed down the growth rate of our sales, but increased our profit," explained Buluc.
Buluc believes rising sales and market shares create lower profits, given the high discounts granted to clients, which generate high sales volumes. This year debuted with a record high for the company, which generated a 40% increase in the first four months of the year against the same time in 2006.
"January was the best month we have witnessed in the last four to five years, which prompted us to post turnover worth more than 40 million euros on April 30, i.e. a 40% increase compared with the same period in 2006," stated Buluc, adding that, in case the company is sold at some point, it will only be to a strategic investor.
"We have had offers and also negotiations, in particular with strategic investors, in order to assess our position. If we choose to contract a partnership, it will be with a strategic investor. An investment fund is a fleeting presence. They invest a certain amount of money, stay for 2 or 3 years, during which time they examine the growth rate, and then leave. This company was created by me and I have no interest in selling or leaving," he concluded.
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