The new financial year has started strongly for biotechnology company PharmaZen and should see it at least match the 2008 pre-tax profit of $444,000, well ahead of last year's $186,000 profit.
Chief executive Craig McIntosh told yesterday's annual meeting in Dunedin that orders for the first quarter of this financial year generated $1.5 million in revenue, $500,000 ahead of last year, when it was hit by recession and, later in the year, an inflated exchange rate.
He said a volatile exchange rate was something exporters had to live with, and PharmaZen showed last year it could remain profitable despite a recession and a dollar which rapidly appreciated in value.
During the last financial year, top-line sales revenue fell 8% because of pressure on margins, but sales by volume grew 3%.
Mr McIntosh said, in recent months, PharmaZen had secured new markets, including one customer it began courting in 2006 and which would generate significant, long-term business.
In the past year, exports of PharmaZen's human and animal health products to the United States had risen, although it had taken a hit in Europe and Asia was described as quiet, except for Japan, which had bounced back strongly, he said.
The recession meant US consumers tended to visit health shops rather than their doctor, hence the increase in sales to that market.
However, animal health products, which were targeted at companion animals, were adversely affected by the recession.
In 2009, PharmaZen, which trades its shares on the Unlisted exchange, reported a $186,000 pre-tax profit on revenue of $5.2 million, compared with $5.8 million in 2008.
Looking ahead, Mr McIntosh said the company had utilised capacity at its Christchurch manufacturing plant after some capital investment, with production of ingredients for health tablets, capsules and liquid greater than ever but requiring fewer staff.
A University of Auckland report on possible adverse health effects of calcium supplements which were rapidly absorbed by the body was likely to promote interest in PharmaZen product MCH-Cal, which was a slow-release calcium-boosting product.
"There are some serious question marks over the safety of some of the more moderately highly absorbing calciums that are being marketed, and our product falls outside that category and may open up some opportunities," he said.
