Traphaco ahead the revenue and profit curve after nine months

October 26, 2020 | 16:08
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After completing 65 per cent of its revenue plan and 78.5 per cent of its profit plan in the first nine months, Traphaco (TRA) forecast fruitful business results as the fouth quarter is ususally the peak season accounting for a large portion of its revenue and profit.
traphaco ahead the revenue and profit curve after nine months
Traphaco ahead the revenue and profit curve after nine months

At the end of the third quarter, the financial report of Traphaco showcased a revenue of VND460 billion ($20 million), marking an increase of 22.4 per cent against the same period last year. The gross profit margin grew 0.7 percentage points as gross profit hit VND249.8 billion ($10.86 million), 23.8 per cent higher than in the previous year.

The accumulated figures showed that Traphaco acquired VND1.31 trillion ($57 million) in revenue and VND178.6 billion ($7.77 million) in pre-tax profit. Although the revenue increased by only 11.4 per cent, pre-tax profit was up 32.5 per cent on-year.

Of the expected consolidated revenue of VND2 trillion ($86.96 million) and after-tax profit of VND180 billion ($7.83 billion) for the whole year, Traphaco completed 65 and 78.5 per cent so far. The ratio of loans to total capital is 6.9 per cent.

traphaco ahead the revenue and profit curve after nine months

All of the corporation's debts are long-term loans taken up to invest and upgrade manufacturing lines at its factories in Hung Yen and Sapa. Thanks to steadily increasing capital flows, it can arrange liquid capital for its activities without the need to take up short-term loans.

Despite the COVID-19 pandemic upending manufacturing businesses, Traphaco has managed to maintain good business performance, professing the success of its restructuring as well as improving manufacturing capacity.

In the long-term, the development of the new medicine segment is expected to help Traphaco maintain both revenue and profit growth, especially once Hung Yen New Medicine Factory completes its investment and upgrade products to the EU-GMP standard.

Focusing on manufacturing and sales as well as quickly adapting to market changes, Traphaco has managed to weather the stormy 2020.

Traphaco's oriental medicine products hold the advantage in the market due to holding the WHO-GACP quality standard for its medicinal materials, helping to improve sales through the OTC and ETC channels in the first three quarters.

In addition, Traphaco has also been diversifying products via research and development and innovating formulas and dosage forms to ensure its products meet customer demand. For example, from its core product Boganic, Traphaco developed a series of new production lines including bottled Boganic herbal tea, Boganic Kid for Children, and Premium Boganic.

In addition to traditional medicine, which maintains its leading position in the industry, Traphaco's western medicine segment is also showing positive growth prospects. Specifically, the demand for personal healthcare products such as Antot Thymo, Sodium Chloride, and T-B is increasing in the context of the complicated COVID-19 epidemic.

Furthermore, the Traphaco eye drug group produced in a closed manufacturing line, including Quimoxi, Ofloxacin, and Tobramycin, has reported double-digit growth against the year prior. New products such as Quimodex and Samaca are highly appreciated by consumers. The growth of the eye medicine group in Vietnam is forecasted to reach 9.8 per cent per year in 2019-2024, according to a study published by Euromonitor.

According to a leader of Traphaco, the consecutive increases in past quarters is the result of its restructuring work during the past year. Accordingly, the company focused on applying modern management systems and change enterprise culture.

Traphaco selected 2020 as the year of building a corporate culture for the new period, with six core values, namely honesty, bravery, proactivity, connection, creativity, and responsibility.

By Ha Vy

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