Adcock falls to hefty 9-month loss as restructuring bites

JOHANNESBURG (Reuters) – South Africa's No.2 drugmaker Adcock Ingram fell to a hefty loss in the first nine months of its financial year on Thursday, hit by weak demand and write-downs related to its restructuring drive.

Adcock, which is in the middle of a turnaround plan led by top shareholder Bidvest, posted a headline loss of 179.5 cents a share in the nine months to end-June, from a profit of 271.7 cents a year earlier.

Adcock said it took 281.9 million rand ($27 million) in write-downs – including some on the value of drug inventory and plants – following a review of the business launched by Bidvest.

Adcock had underperformed rivals such as Aspen Pharmacare as it grapples with slowing sales, over-reliance on a heavily regulated home market and poor distribution network.

Bidvest, a vast conglomerate that spans shipping to catering, acquired its 34.5 percent stake in Adcock early this year, blocking a $1.2 billion takeover bid from Chile's CFR Pharmaceuticals.

Bidvest is looking to turn Adcock around by reorganising it to match its own decentralised model.

A document from South Africa's competition regulator seen by Reuters this month said Bidvest intended to increase its stake to more than 50 percent.

Bidvest has said it has yet to make a decision on whether or not to make an offer to shareholders.

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(1 US dollar = 10.6086 South African rand)