ADDRESS OF THE CEO/MB PRESIDENT OF ALKALOID AD SKOPJE


Year 2018 was marked by various challenges in the geopolitical currents, which may affect the economy – globally and nationally.
On national level, a significant step forward was made with the resolution of the name issue, advancing our country’s Euroatlantic integration agenda, which emits a positive impulse that the Macedonian economy would become priority focus of interest.

RESULTS

Despite all objective and subjective challenges,“Alkaloid“ managed to generate positive financial results in its operations employing extraordinary efforts and precautions in everyday operations.

We achieved total consolidated sales of MKD 9.783.285.973, which represents a growth of 8%. Our individual net profit amounted 848.199.257, growing 11% and consolidated net profit amounted to MKD 862.410.928 noting 7% growth; all compared to 2017.

85% of our total (consolidated) sales were in the segment of Pharmaceuticals, 9% in Cosmetics, 3% Botanicals and 3% Chemicals segment.

Out of the total consolidates sales, 37% were effectuated on the domestic market and 63% were placements in the foreign markets. Out of those, 35% belonged to the markets of Southeastern Europe, 21% in Western Europe, 6% were placements in Russia and CIS and 1% on the remaining markets.

In the course of 2018, we had 166 new employments in the company and, as at 31 December 2018, “Alkaloid AD Skopje“ counted 2022 people.

STOCK EXCHANGE OPERATIONS

According to the records of the “Macedonian Stock Exchange“, the shares of “Alkaloid“ in the course of 2018 were once again amongst the most traded and the most liquid ones.

“Alkaloid AD Skopje“, as one of the leading companies on the “Macedonian Stock Exchange“, in the regular stock exchange operations participated with traded MKD 574.304.677, which is 13.48% of the total turnover recorded on the first official market of the Stock Exchange in 2018.

The share price of “Alkaloid AD Skopje“ ranged from MKD 7.400 to MKD 8.629, with an average of MKD 8.050,33, which represents a growth of 26.97% of the average price of the share compared to 2017. The dividend income from the shares of “Alkaloid AD“ is 3.29%, which is significantly better investment than the bank savings.

A recognition for the high level of corporate management, transparency in the operation and quality of communication with the investors, the institutions and the public in general is the “Crystal Bell 2018” granted to “Alkaloid“ as first ranked in competition among 105 quoted companies at the 20th Conference of the “Macedonian Stock Exchange“.

NEW VENTURES

2018 was also marked with the trend of expansion of the marketing authorizations and initiation of new projects. We did more than 44 out-license and in-license projects worldwide.

We obtained 163 marketing authorizations for pharmaceutical products and 97 for medical devices and food supplements. In 2018, we were granted the first authorization for the African market and signed the first out-license agreement with one of the leading global pharmaceuticals – Sandoz for the market in Germany.

Through our Department for Business Development, we effectuated over EUR 10 mil. completing various projects and we intensively worked on new product portfolios out of which in the middle and the long run, our expectations are optimistic.

INVESTMENTS

In 2018, the overall investments of the Company amounted to MKD 1.081.736.913, marking 26% increment compared to year 2017. In 2018, Alkaloid was granted the acknowledgement for highest realized investments in the country by the Macedonian Chamber of Commerce.

The ongoing investment activities in accordance with the capital investments plan included: purchasing of new machine for production of tablets (which increased the capacity in this segment for 50%), we installed new equipment for drying granules (enabling twofold production capacity of our leading product Pancef ® (cefixime). In order to increase the production capacity of our leading export market, we ordered a new packaging line for our production in Belgrade, Serbia.

In order to comply with the EU regulations on forfeit pharmaceuticals, in the course of 2018 we completed the installation of serialization software and corresponding equipment in all our packaging lines.

In 2018, the company signed an Agreement with the Agency for Investments at the Government of Republic North Macedonia, according to which, the company was obliged to invest an amount of at least EUR 50 mil in the course of 5 years, and the constant adherence to the provisions of this agreement, would entitle Alkaloid to a 10% return of the invested amount or maximum of EUR 1 mil per year. The first compensation based on this Agreement amounting to MKD 35.292.916 was made in 2018. Alkaloid also signed an Agreement with the State Innovation Fund according to which the company would develop a new innovative product, thus MKD 14.536.980 would be reimbursed on that basis successively.

CORPORATE SOCIAL RESPONSIBILITY

Socially responsible activities, as one of the company’s main features and top priority in the operative agenda, continued with strong intensity in the course of 2018.

Eighth year in a row, the employees of the company, under the auspices of the Foundation “Trajche Mukaetov” joined together in another charity event to raise MKD 1.101.344,00 (approx. EUR 18.000), funds intended for the association for rare diseases “Life with Challenges” from Bitola.

Eleventh year in a row, the Foundation “Trajche Mukaetov” grants scholarships to talented students of medicine and pharmacy at the state university “Sts. Cyril and Methodius”.
Out of 458 recipients of scholarships (224 students of pharmacy and 234 students of medicine), 112 are active scholarship holders and 76 of these graduated students already started their careers at Alkaloid.
In the past 11 years, we have invested EUR 1.36 million in scholarships for future pharmacists and doctors of medicine. In 9 years, we donated above EUR 21.000 to valedictorians of the Faculties of Pharmacy and Medicine at the state “University Sts. Cyril and Methodius“ and thorough our humanitarian events organized during the past 8 years, we donated over EUR 110.000 to various institutions.

In order to inspire the creativity and contribute to the academic development of undergraduate students, their personal and professional profiling and preparedness for facing future career challenges, “Alkaloid AD Skopje” signed “Memorandum for cooperation on internship program” with four faculties from the “University Sts. Cyril and Methodius”: the Faculty of Pharmacy, Medicine, Institute of Chemistry at the Faculty of Natural Sciences and the Faculty of Technology and Metallurgy. The first internship cycle commenced in May/June 2018. 11 out of 17 internships remained to work for the company.

The internship program of “Alkaloid” is a joint project of the company, the biggest state university and the students who represent the future workforce of the country.
Through this project, “Alkaloid” and the “University Sts. Cyril and Methodius” plan to jointly compile, adapt and structurally coordinate the educational programs according to mutual needs in a scope that is optimal for the educational-internship process. As a socially responsible company, we want to include the students in our day-to-day business activities and processes in order to strengthen their professional skills. Through this internship program, our aim was to build synergy out of which all parties involved would have benefits, whereas the scientific and research activity in this country would be raised on a new, higher level. With these projects, the new generation of millennials will be able to use the opportunity to expand their knowledge and acquire new practical skills interim real processes.

PROSPECTS

Although the state statistics indicate shortages of certain vocations, migration of young people from this country in quest for better economic conditions, insufficient experience and motivation of the workforce; “Alkaloid“ will invest maximum efforts to change such occurrences at least in our sphere of operations. We will aim to make small but significant improvement not only in modernization of the company operations in the sense of introducing innovations, new fresh ideas and processes, but also in the sense of improving the quality of life of youth and raising the scientific and research activities on a new higher level.

The company is and will remain leading example of superior quality of processes, well-trained and motivated staff, standards that are compatible with the world regulation in industry as well as products which are highly competitive and legitimately present in nearly 40 countries in the world.

Zhivko Mukaetov
CEO/MB President