Abbott Pakistan’s net sales increased by 13% YoY in CY23 to PKR 55.5 billion compared to PKR 49.3 billion in CY22. The growth was more pronounced in the 9MCY24 period, where net sales rose by 20% YoY, reaching PKR 49.6 billion against PKR 41.2 billion in 9MCY23. In CY23, the pharmaceutical segment led with 20% growth to PKR 37.8 billion, while Nutritional declined 8% to PKR 11.4 billion.
Diagnostics increased 16% to PKR 4.8 billion, and Others rose 18% to PKR 1.5 billion. In CY23, gross margins shrank to 21% from 29% in CY22, mainly due to revision of product cost, rupee devaluation and general inflation.
However, in 9MCY24, the gross margin improved to 28%, driven by price adjustment and various other efficiency measure taken across the operations. Earnings per share (EPS) dropped significantly to PKR 2.67 in CY23 from PKR 30.69 in CY22, mainly on account of increase in product cost and rupee devaluation.
Additionally, no dividend per share (DPS) was announced in CY23 compared to PKR 15.00 in the previous year. For 9MCY24, EPS showed recovery, standing at PKR 40.34 compared to a negative EPS of PKR 8.10 in 9MCY23. The Government of Pakistan approved the deregulation of drug prices for products outside the National Essential Medicine List (NEML). This allowed the industry, including Abbott, to increase prices on its non-essential portfolio, restoring viability for products previously discontinued due to adverse margins.
However, the decision has been challenged in the Lahore High Court. Abbott reiterated its commitment to responsible pricing practices, ensuring patient interests remain a priority as it navigates this development. The company continues to revive discontinued products as they become viable due to deregulation. However, the challenge remains in the essential items, where the industry is only allowed to increase the price up to 70% of CPI with a cap of 7%.
The viability of such products is also dependent upon the rupee stability and inflation. Company’s sales to institution customers is 7-8% of the total sales, while 5-6% of the total sales is exported to countries like Afghanistan, Bangladesh and Sri Lanka. Going forward, the management remains hopeful to see volumetric growth in CY25.
The company is also working to introduce biosimilars, details of which are not disclosed yet. The company is targeting to acquire more customers in the diagnostics segment and margins remains healthy. The management does not see Centrum by Haleon as direct competition to its products like Surbex-Z. According to the management, the industry-wide and company’s mix of essential & non-essential medicines remains close to 50%-50%.
Important Disclosures
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