The profit of the Delta Group amounted to ISK 1,086 million in the first six months of 2002. This contrasts with a profit of ISK 155.6 million in the first six months of the preceding year, and corresponds to an increase of ISK 930.2 million between years. Earnings before interest, depreciation, taxes and amortisation (EBIDTA) amounted to ISK 1,436.8 million, compared with ISK 522.9 million in the corresponding period of the preceding year. Operating profits amounted to ISK 5,498 million, against ISK 1,507.9 during the corresponding period of the preceding year. This constitutes an increase of the Company's revenue of ISK 3,990.1 million between years. Operating expenses during the period amounted to ISK 4,425.7 million, compared to ISK 1,114.2 million in the corresponding period of the preceding year. The return on equity was 69%.

The total assets of the Group amounted to ISK 11,547.1 million at the end of the period, while total liabilities amounted to ISK 8,254.3 million, leaving equity at ISK 3,292.7 million and the equity ratio at 28.5%.

 

Working capital from the operation amounted to ISK 1,085.2 million, and net cash provided by operating activities amounted to ISK 837.6 million.

The operation of subsidiaries returned a profit of ISK 381.4 million during the first six months of the year.

 

Delta's highest-selling drug is Citalopram, generating revenues of ISK 1,376.6 million during the period. Germany remains the most important market for the Company. Other large markets include Scandinavia, the Netherlands and the United Kingdom. The Company continues its market penetration into the US market, and the goal is to complete the first trade contract before the end of the year.

 

The operation of Delta has undergone substantial changes in the past few months. During the year, the Company has acquired and prepared a merger with Omega Farma. Also, Delta acquired the Danish marketing firm UNP last March. The Company has opened a sales office in Germany, in order to further improve its services to its largest marketing area. A Purchasing Office was recently opened in India, with the purpose of procuring raw materials for development and production. India is a leader in the development and production of raw materials, and its industry in this field continues to gain ground in the European market. Another objective of the Purchasing Office is to forge closer ties with other Asian markets. Furthermore, a separate research and development company, Delta R&D, formally began operations in Malta earlier this year. The goal of the company is to develop three new drugs per year on average. Patenting laws in Malta are particularly favourable for the development of generic drugs.

 

The boards of directors of Delta and Pharmaco have today agreed to enter into negotiations regarding the merger of the two companies. The discussions will start in the next few days. Shareholders will still be sent a takeover bid, as stipulated by law. A shareholders' meeting is planned for September, where the proposal for the merger will be submitted.

 

A co-operative team of management staff from Pharmaco and Delta has been formed to prepare a plan for the merger, which holds promise of substantial synergistic effect as well as a strong new company. Both firms possess far-reaching knowledge and experience in the development of generic drugs, and employ highly capable staff. A merger of the two enterprises would lay the foundation for one of the most progressive generic-drug companies in Europe, with a strong market position in western, central and eastern Europe. The combined strengths of Delta's scientific knowledge and the production capacity of Balkanpharma will produce a firm capable of competing with the world's largest generic-drug companies.

 

Time schedules regarding the merger will be submitted to the boards of the companies. A further presentational meeting regarding the organisation and future plans of the companies will be held in September.