Mercator Medical once again increased sales revenue

Mercator Medical S.A. with its leading position in the medical gloves market in Poland presents good results for Q3 2015, which is the effect of a consistently implemented development strategy. The interim report published on 16 November 2015 shows that the Group is continuing a positive trend in sales revenues and EBITDA margin.

The company’s incremental revenues for three quarters of 2015 totalled PLN 163.6 million, compared to PLN 120.9 million in the same period of the previous year. Thus, incremental revenues for three quarters of 2015 increased by more than 35%, including for the sales of products – by over 78%, and for the sales of goods – by 21%. The increase in sales YOY for the 9 months described above was recorded in all assortments, especially gloves, and mainly in the following countries: the United States, Poland, Saudi Arabia, Thailand and Russia.

For three quarters of 2015 and 2014, EBITDA was PLN 17.1 million and PLN 12.2 million, respectively – which means increase by PLN 5 million (40.6%) YOY. In three quarters of 2015, EBITDA profitability reached 10.5%, i.e. 0.4 percentage point above the last year’s level. On the other hand, the net result for 9 months of 2015 was PLN 8.2 million (PLN 7.4 million in the same period of the previous year). The results for Q3 2015 alone are equally positive – the company recorded strong revenue dynamics and EBITDA, as well as maintained good profitability despite one-off factors resulting from the devaluation of the Ukrainian, Russian and Thai currencies.

In Q3 2015, revenues from sales of products, examination gloves manufactured at the Thailand factory, increased by 54.8% (PLN 7.9 million). This increase is due to the new production capacity released during 2014 and in the first half of 2015 – from 144 million items to over 300 million gloves per quarter. It is also worth noting the improvement observed in Q3 in margin percentage YOY on sold production – from 17.2% to 22.3%.

Mercator Medical has already successfully completed the first extension of the factory. In March 2015, at our Mercator Medical factory in Thailand, the fourth and thus the last of the previously planned production lines for latex gloves was started. A few days before the publication of the results for Q3 2015, the Group announced the planned further extension of the medical gloves factory in Thailand. At the area of the property owned by the Thai subsidiary, Mercator Medical is planning to open a total of 7 new production lines for gloves, including infrastructure, with an aggregate capacity of approximately 140 million gloves per month.

Our forecasts for the development of the medical gloves market convinced us to seriously consider a substantial extension of the factory, which would let us more than double our potential productivity (from 100 million gloves manufactured currently per month to approx. 240 million gloves after completion of the planned investment) and, as a consequence, our share in the global market of medical gloves. We want to make the final decision on the expansion in the first half of next year, after obtaining the necessary administrative permits and tax exemptions and after providing funds for the project on appropriate terms. The investment would be completed and the production would start after approximately 18 months from its commencement”, says Wiesław Żyznowski, PhD, President of Mercator Medical S.A.

The Group is committed to strong foreign expansion. One of the completed objectives for 2015 in distribution was the launch of direct sales in Russia and increasing its dynamics in the Czech Republic and Slovakia. Export sales increased to the USA, to former USSR countries other than Russia, as well as to the Balkans. We also saw an increase in the market share in Hungary and Romania, and the Group also managed well on the currently difficult Ukrainian market.

Approximately 1/3% of the factory production is sold by the Group to the North American and Middle East markets. The rest is sold in Europe, Africa and South America. Extension of the gloves factory also improved the cost competitiveness of Mercator Medical (Thailand) Ltd. mainly due to the optimisation of fixed costs, chiefly in the area of administration costs”, adds the President of Mercator Medical.