Oasmia Pharmaceutical AB :OASM-US: Earnings Analysis: Q2, 2017 By the Numbers : January 19, 2017

Oasmia Pharmaceutical AB reports financial results for the quarter ended October 31, 2016.

Highlights

  • Summary numbers: Revenues of USD 0.01 million, Net Earnings of USD -4.74 million.
  • Gross margins widened from -78,861.54% to -64,394.64% compared to the same period last year, operating (EBITDA) margins now -62,369.64% from -76,528.85%.
  • Change in operating cash flow of -21.94% compared to same period last year is about the same as change in earnings, likely no significant movement in accruals or reserves.
  • Earnings growth from operating margin improvements as well as one-time items.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income growth:

2016-10-31 2016-07-31 2016-04-30 2016-01-31 2015-10-31
Relevant Numbers (Quarterly)
Revenues (mil) 0.01 0 0.01 0.7 0.01
Revenue Growth (%YOY) 4.44 -83.53 67.97 1045.32 -92.08
Earnings (mil) -4.74 -4.37 -4.01 -2.96 -5.13
Earnings Growth (%YOY) 7.6 7.08 -14.11 16.46 -38.14
Net Margin (%) -73826.79 -102558.33 -55901.69 -419.36 -83451.92
EPS -0.13 -0.12 -0.11 -0.08 -0.16
Return on Equity (%) -56.28 -46.86 -39.78 -28.68 -50.29
Return on Assets (%) -31.86 -27.99 -25.8 -19.1 -33.95

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Market Share Versus Profits

Revenues History
Earnings History

Compared to the same period last year, OASM-US‘s change in revenue was close to the amount of its change in earnings. It remains to be seen how the rest of its peer group’s results will turn out and if OASM-US‘s performance is a sign of any major shift in the composition of market share in this sector. Also, for comparison purposes, revenues changed by 50.84% and earnings by -8.58% compared to the previous period.

Earnings Growth Analysis

The company’s earnings growth was influenced by year-on-year improvement in gross margins from -78,861.54% to -64,394.64% as well as better cost controls. As a result, operating margins (EBITDA margins) rose from -76,528.85% to -62,369.64% compared to the same period last year. For comparison, gross margins were -90425% and EBITDA margins were -87,255.56% in the last reporting period.

Cash Versus Earnings – Sustainable Performance?

OASM-US‘s year-on-year change in operating cash flow of -21.94% is around its change in earnings. This suggests that there are likely no significant movement in accruals or reserves for managing earnings this period.

Margins

The company’s earnings growth has also been influenced by the following factors: (1) Improvements in operating (EBIT) margins from -78,861.54% to -64,394.64% and (2) one-time items. The company’s pretax margins are now -73,826.79% compared to -83,451.92% for the same period last year.

EBIT Margin History
PreTax Margin History

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Company Profile

Oasmia Pharmaceutical AB is engaged in reaserch and development of drugs. It formulates pharmaceutical products for ovarian and breast cancer for humans and cancer for animals. Its portfolio includes Paclical, Doxophos, Docecal, and OAS-19 for human health; and Paccal Vet and Doxophos Vet for animal health. The company was founded by Julian Aleksov and Bo Cederstrand on April 15, 1988 and is headquartered in Uppsala, Sweden.

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