PRIM improves its quarterly net profit by 87% with an increase in sales of more than 10%

The Prim Group recorded a significant improvement in sales, EBITDA and both its operating and net profits during the third quarter of this year, which enabled the company to lessen the negative impact suffered by its business during the first half of the year, as a result of Covid-19.

Net turnover for the third quarter (July-September) grew by 10.6% in comparison to the same months in 2019, while EBITDA and net profit increased by 54.4% and 87%, respectively, in the same period.

This positive growth stems from a planned diversification of the business and the company’s adaptation to offer the best quality in demand services and products during the pandemic. It was also a reflection of the recovery of non-Covid-19 activities in hospitals and health centres, for whom the group is a traditional supplier.

The company was also able to adapt to the situation caused by the pandemic which resulted in a clear reduction of operating, commercial and financial expenses, in addition to the removal of the non-recurring expenses experienced in the previous year. Management efforts were focussed on maintaining solvency and avoiding any temporary staff layoffs or furlough measures in order to be able to respond to this new recovery phase of activity with a united front, as was seen in this quarter.

The Group ended the first nine months of the year with a turnover of close to €105 million, which represented a decrease of only 3.8% in comparison to the same period the previous year when from January to June the decline was over 10.3% in comparison to the same period in 2019.

Aggregate EBITDA in September amounted to almost €12 million, down 10.3% and a there was a consolidated net profit of €6.3 million, down 7.6%, compared to declines of 30.1% and 31.7%, respectively, seen at the end of June.

In the Management Report for the third quarter, approved by the Board of Directors, the hospital supply company has set out the measures it has put in place to combat the negative effects of Covid-19 and some of the other impacts that the pandemic is having on business.

Among the actions aimed at protecting its stakeholders, employees, customers, suppliers, subcontractors and society as a whole, the company emphasises the strengthening of its cash reserves, the financial support offered to private customers and suppliers to contribute to the continuity of their services, job protection, and its participation in the corporate solidarity chain implemented in Spain at the beginning of the pandemic.

Regarding the overall impact on business, the group maintains a cautious and prudent position, as there are still many uncertainties surrounding the evolution of the virus. However, it does state that there are no significant concerns regarding payment collections from customers, debt payments to creditors or its intangible assets. The company remains unchanged in terms of its Strategic Plan, since, based on current data, it considers that the situation will not affect its business plans in the medium and long term.

Dividend Distribution

The financial solvency of the group and its liquidity situation meant that the Company was able to approve the distribution of a final dividend of €0.22 per share at the Ordinary General Shareholders’ Meeting. This will be payable tomorrow, 13 November, in addition to the €0.11 per share paid in January, for an overall shareholder remuneration of €0.33 per share.

At the Meeting, the first under the chairmanship of Lucia Comenge, the executive spoke with shareholders of her confidence for the future, based on the overall strong position of the Group and the future prospects within the sector:

The new chair stated that: “The health technology sector is experiencing significant growth, mainly due to several factors related to an aging global population, longer life expectancy and the gradual increase of chronic diseases.”

She went on to say that: “The high rate of obsolescence of equipment currently found in our hospitals will require a change of strategy, which will bring the life cycle of products and their quality to the foreground.”

Regarding the overall strong positioning of the group, Lucía Comenge said that: “Our competitive advantage lies precisely in being able to offer a global service thanks to the high quality of our medical devices and our flexibility to adapt to the needs of our customers, both in terms of deadlines and guidance on the use of our devices”.

She also addressed the growth strategy that includes, according to the chair: “The expansion of the business portfolio in its export activity and the improvement of its range of technologically innovative products and services for the domestic market”.

The General Meeting also approved the amendment of the Articles of Association and the Regulations of the General Meeting and the Board of Directors, with the dual purpose of adapting these to the changes established for the group’s management and to the best practices from the Code of Good Governance of Listed Companies, in its latest revised version for June 2020. This means that Prim has become one of the first listed companies to apply the updated version of these Good Governance recommendations.

This post is also available in: Spanish