South Africa's Adcock swings to first-half loss, halts dividend
JOHANNESBURG May 27 (Reuters) - South Africa's second-biggest drugmaker Adcock Ingram posted close to a $4 million first-half loss on Tuesday, hit by rising raw materials prices and costs related to a failed $1.2 billion takeover bid from a Chilean suitor.
Adcock said the headline loss came in at 39 million rand ($3.77 million), or 24.8 cents per share, in the six months to March 31, against headline earnings of 317 million rand, or 188 cents per share, a year earlier.
Headline earnings per share, the most widely watched profit gauge in South Africa, strips out certain one-off and non-trading items.
The company said it would not pay any dividend for the reporting period.
Adcock, which is struggling with slowing sales, poor distribution and over-reliance on a heavily regulated home market, will pay $15.6 million in costs related to the collapsed deal with Chile's CFR Pharmaceuticals.
The would have reduced Adcock's reliance on South Africa and pushed it into the fast-growing markets of Latin America and Southeast Asia.
Using a 34 percent stake built up during the Adcock and CFR talks, Bidvest sank the Chile-South Africa tie-up this year and has since been pushing through changes at Adcock, with Bidvest CEO Brian Joffe taking over as chairman and one of his veteran lieutenants, Kevin Wakeford, becoming chief executive.
"It is clear that these results are not what we would have wanted," Wakeford said. "It is because of this that we have, in the past few weeks, spent much time developing plans to reorganise the business."
He also said his team would implement a new structure that would allow each of Adcock's three divisions to draw up and execute its own operational strategy.
Adcock, which makes more than 90 percent of its sales in South Africa, has an over-the-counter drugs business, a prescription drugs operation and a hospital products unit. ($1 = 10.3574 South African Rand) (Editing by David Goodman)
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