Adcock Ingram flags 9-month losses, shares sink to near 5-year low

JOHANNESBURG (Reuters) – Adcock Ingram flagged nine-month losses and gave a gloomy outlook on Monday, pushing shares in South Africa's No.2 drugmaker to their lowest level in almost five years.

The stock slumped nearly 7 percent before recouping some of the losses to close 5.27 percent lower at 48.68 rand, a level last seen in December 2009.

Adcock said headline loss per share would likely fall in range of 175 and 185 cents when it reports the results for the nine months ended June later this month. It posted headline earnings per share, the main profit measure in South Africa, of 271.7 cents the same time a year earlier.

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

The company is the middle of a turnaround plan led by top investor Bidvest, which torpedoed a $1.2 billion takeover bid from Chile's CFR Pharmaceuticals earlier this year.

The plan is aimed at making it more nimble and increase accountability by reorganising to match the decentralised model of Bidvest.

It gave investors little comfort about when it would start turning profit, saying it was too early for the strategy to start bearing fruit.

"But the board remains optimistic about the group's longer term prospects," the company said.

Adcock said the results also included "several substantial" write downs as some of its factories ran at low levels of capacity.

(Reporting by Tiisetso Motsoeneng, editing by William Hardy)