By Ahmad Saleh, IraqiXchange.
Kindi Veterinary Vaccines (ISX: IKLV) surprises investors and announces after tax net profit of 378 mil IQD for 2009, up tenfold from the previous year. On August 18th it published its annual results and returned to trading after being suspended from the Iraq Stock Exchange earlier this month for not disclosing last year’s results to shareholders by the July 31st deadline.
Formerly known as Veterinary Vaccine Institute, a government institution which has been semiprivatized since the start of the decade and is currently a mixed sector company whose state ownership has been reduced to 25% since. Al Kindi's laboratories produce and market both viral and bacterial veterinary vaccines in an effort to combat enzootic diseases and increase the productivity of the country’s native animals. It is the only laboratory of its kind in the animal immunization business in Iraq but now faces competition from foreign imports due to its insufficient production which is far from enough to cover demand at this moment. The company complains from the lack of security but mostly from power shortages disrupting production.
In spite of the challenging environment, the company invested 200 mil IQD to upgrade its facilities and expand its production capacity in 2009 resulting in a 62% hike in sales. Kindi announced its best year yet with record sales of 1.12 bil IQD mainly deriving from the increase in production of Sheeppox and Newcastle vaccines, up 102% and 14% respectively. Economies of scale have also improved profit margins dramatically leading to net profits after tax of 378 mil IQD or earnings per share of 0.158 dinars.
In 2009, Al Kindi also raised its capital from 1,000 to 2,400 mil IQD through a 20% bonus issue and 120% rights issue. The first 200 mil IQD of capital was raised by utilizing 130 mil IQD from its retained earnings and 70 mil IQD from reserves to issue free shares while the balance of 1,400 mil IQD being raised from existing shareholders at a price of 1 dinar per share. The company will be on General Assembly on August 31st and its shares will stop trading as of Monday August 23rd for the duration of the annual assembly while the Board of Directors discuss the 2009 results and decide on the allocation of last year's surplus.