Adcock to sell Indian unit, focus on South Africa

JOHANNESBURG (Reuters) - Pharmaceutical firm Adcock Ingram is disposing of loss-making Indian unit Cosme Farma Laboratories Ltd to focus on its South African home market, CEO Kevin Wakeford said on Wednesday.

Adcock Ingram bought unlisted Cosme Farma for 822 million rand ($62.76 million) in 2013. It has since taken writedowns on its value of 278 million and 74.4 million rand.

Significant additional investment would be needed to compete effectively in the Indian market, the company said in its full-year results on Wednesday.

Adcock Ingram, controlled by South African conglomerate Bidvest Group , said there was no certainty regarding a sale in the short term nor on how much it might fetch for Cosme Farma.

 

Since Bidvest foiled a takeover bid by Chile's CFR Pharmaceuticals last year, Adcock has changed management, cut costs and started on a restructuring, which now includes the sale of the Indian unit.

"It's an absolutely massive pharma market, but dominated by massive players as well, so if you are a small player in that market it is just going to be a battle," said Wakeford.

Instead, the company is focusing on South Africa where its products range from branded cough syrups to generic drugs.

On Wednesday, Adcock reported headline earnings per share of 160.1 cents for versus a 2014 loss of 100.8 cents.

Headline EPS, which strips out certain one-off items, is the main profit gauge in South Africa.

Shares in Adcock were up 5.06 percent at 50 rand as of 0908 GMT.

($1 = 13.0985 rand)

(Reporting by TJ Strydom; editing by Jason Neely)