INTERIM REPORT OF BIOHIT GROUP 1 JANUARY TO 30 JUNE 2007
The Biohit Group had total net sales of EUR 16.1 million during the reporting
period (EUR 15.2 million in 1Q-2Q/2006). The operating loss for the reporting
period was EUR 0.7 million (operating loss EUR 0.3 million). The loss for the
period was EUR 0.8 million (loss EUR 0.6 million). The result was weakened by
slower than expected sales development for liquid handling and diagnostic
products in the Asian markets.
NET SALES
The Biohit Group's net sales rose by 6 % compared with the corresponding period
in 2006 and totalled EUR 16.1 million (EUR 15.2 million). Sales of liquid
handling products and related after-sales services accounted for 95 % of net
sales. The second quarter's net sales development did not meet the company's
expectations. While sales growth continued to be strong in Russia, the
construction of a distribution network in China and Japan progressed slower than
anticipated. Furthermore, the weakening of the US dollar and the Japanese yen
had a negative impact on Biohit Group's net sales. Reported net sales for the
diagnostics business reached the same level as last year for the same period.
This was attributable to a large non-recurring transaction recognised during the
first half of 2006.
The net sales of the liquid handling business amounted to EUR 15.3 million (EUR
14.4 million) and the net sales of the diagnostics business to EUR 0.8 million
(EUR 0.8 million).
RESULT
The operating loss was EUR 0.7 million (operating loss EUR 0.3 million). The
loss for the reporting period was EUR 0.8 million (loss EUR 0.6 million).
The operating profit of the liquid handling business was EUR 0.8 million
(operating profit EUR 0.9 million), the operating loss of the diagnostics
business being EUR 1.5 million (operating loss EUR 1.2 million).
Weaker than expected sales growth, particularly in the Asian market, had a
negative impact on Biohit Group's performance.
BALANCE SHEET
The balance sheet total was EUR 29.5 million (EUR 28.0 million) and the equity
ratio was 42.9 % (48.5 %) on 30 June 2007. The fall in the equity ratio was
primarily due to an increase in both current and non-current liabilities and the
loss for the reporting period.
LIQUIDITY
During the reporting period, the operating activities had a net cash flow of EUR
0.4 million (EUR -0.3 million). At the end of the reporting period, the liquid
assets of the Group totalled EUR 1.3 million (EUR 0.9 million). The company has
acquired EUR 2.3 million of new long-term financing during the reporting period.
Current ratio was 2.0 (2.5).
INVESTMENTS
Gross investments in the reporting period totalled EUR 1.3 million (EUR 1.1
million). Investments were primarily to increase production capacity and to
purchase equipment for the manufacture of liquid handling products in Kajaani.
PERSONNEL
The average number of personnel in the reporting period was 346 (293), with 176
(158) persons being employed by the parent company and 171 (135) by the
subsidiaries. The increase in personnel was mainly due to the start up of the
production facility in China.
MAIN EVENTS OF THE REPORTING PERIOD
Liquid handling business area
Biohit's liquid handling business develops, manufactures and markets laboratory
equipment and accessories for the pharmaceutical, food and other industries, in
addition these products are used in research institutions, universities and
hospitals. Biohit's products are also used to complement the diagnostic test and
analysis systems of many global companies. The product range includes mechanical
and electronic pipettors as well as disposable tips
(www.biohit.com/liquidhandling). In addition, the company offers maintenance,
calibration and training services related to these products through its global
distributor network (www.biohit.com/liquidhandling, www.pipettedoctor.com).
The sales of the liquid handling business area developed according to plan
during the reporting period, except for in the Asian markets. The company
continued its focus on product development and OEM co-operation, developing
cost-effective production processes and logistics, and expanding the pipettor
maintenance services business.
Biohit further developed its distribution network to bolster the company's
position in its main market areas. During the reporting period, Biohit and VWR
International, a leading global distributor of scientific equipment, laboratory
supplies, chemicals and furniture, entered into an agreement concerning
distribution of liquid handling products in Europe. Biohit and VWR have been
co-operating in the North American market for several years.
Under the terms of the agreement, Biohit becomes a focus supplier of pipettors
and disposable pipettor tips to VWR customers throughout Europe. The new
agreement further strengthens Biohit's distribution network in Europe, one of
its major market areas, and the company's position in key market segments. This
co-operation is expected to have a positive impact on demand for Biohit products
in Europe towards the end of 2007.
In the Asian markets, growth in the net sales of liquid handling products has
been more modest than expected and the reorganisation of the distribution
network has taken longer than originally anticipated.
Diagnostics
Biohit's diagnostics business develops, manufactures and markets products and
analysis systems primarily for the diagnosis, screening and prevention of
diseases of the gastrointestinal tract. The product range includes GastroPanel
and GastroView examinations (www.gastropanel.net, www.gastroview.com) for
primary health care; lactose intolerance and Helicobacter pylori quick tests for
specialised health care; and instruments and analysis systems for laboratories
(www.biohit.com/diagnostics). Additionally, the company runs a service
laboratory in Finland.
The diagnostics business has continued its focus on developing operations in
line with the strategy.
During the reporting period, the company has been systematically building up a
distribution network in China and other main market areas. However, business
development in the Asian markets has been slower than expected.
A Food and Drug Administration (FDA) approval is anticipated in the USA for
GastroPanel's Pepsinogen I and II tests possibly by the end of this year. Since
the FDA has not granted any company an approval for such tests, Biohit has had
to supplement its original application by ordering two extensive and
time-consuming patient studies in the USA. In these studies, the results
provided by Biohit tests were compared to the histology of several biopsies
(normal finding or atrophic gastritis) obtained during gastroscopy.
Biohit's GastroPanel and GastroView examinations promote the safe and
cost-efficient diagnostics and treatment of dyspepsia (recurrent or persistent
pain or discomfort in the upper stomach), Helicobacter pylori (H. pylori)
infection and atrophic gastritis (damage to, and malfunctioning of, the gastric
mucosa) and the related risks (gastric cancer, peptic ulcers, deficiencies in
vitamin B12, iron and calcium), particularly in primary health care
(www.gastropanel.net, www.gastroview.com).
The 13C urea breath test and the stool antigen test, still extensively used in
the diagnostics of dyspepsia and H. pylori infections, provide no information
other than a diagnosis of a possible H. pylori infection. Furthermore, the test
results are unreliable (don't find H. pylori infection), particularly in those
cases (for instance, atrophic gastritis caused by H. pylori and the resultant
risks) in which the correct diagnosis of an H. pylori infection, which often
causes atrophic gastritis, would be of the utmost importance for patient safety.
The use of these tests, and diagnoses and treatments based on their results, may
cause delays in the diagnosis and treatment of potentially severe illnesses
(atrophic gastritis and the possibly resultant gastric cancer, peptic ulcers
etc.).
The blood-sample based GastroPanel and GastroView examination tests (Pepsinogen
I and II, H. pylori IgA & IgG antibodies and Gastrin-17, which is not included
in the GastroView examination) have long been reimbursed in accordance with the
reimbursement rates of Kela (the Social Insurance Institution of Finland). These
examinations enhance the early diagnosis of, for instance, the mild or often
asymptomatic atrophic gastritis, the main risk factor in gastric cancer, thus
improving patient safety and reducing the frequency of unnecessary examinations
(gastroscopy) and treatments (continuous suppression of gastric acid release
with PPI medication and/or unnecessary anti-Helicobacter pylori treatments).
(See Further information).
In August, Biohit's UK subsidiary will begin to market and sell the GastroView
laboratory service in co-operation with a rapidly expanding pharmacy chain,
targeted at persons suffering from dyspeptic problems (which affect 20-40 % of
the population) and persons wishing to maintain or improve their health (due to
asymptomatic atrophic gastritis and the related risks) (www.gastroprofile.com,
www.gastroview.com ). If this carefully prepared collaboration is successful,
Biohit will further expand such co-operation with pharmacy chains in the UK and
other markets.
During the reporting period, Biohit signed an agreement with the Finnish company
Fennobon Oy concerning the manufacture of XyliCyst chewing gum, a
consumer-oriented functional food product. XyliCyst chewing gum eliminates
carcinogenic acetaldehyde that forms in the mouth during smoking, and alcohol
consumption, thereby helping to reduce the risk of cancers in the upper
digestive tract. Over 80 per cent of the approximately 2 million new upper
digestive tract cancer cases diagnosed each year are caused by smoking and the
use of alcohol.
Biohit is currently investigating the possibility of spinning out its
diagnostics business into a separate legal entity.
EQUITY TURNOVER AND PRICE DEVELOPMENT
Biohit Oyj's series B shares are listed on Helsinki Exchanges in the Small cap /
Health care group.
--------------------------------------------------------------------------------
| BIOBV / OMX Helsinki | 1-6/2007 |
--------------------------------------------------------------------------------
| Highest, EUR | 3.29 |
--------------------------------------------------------------------------------
| Lowest, EUR | 2.02 |
--------------------------------------------------------------------------------
| Average, EUR | 2.77 |
--------------------------------------------------------------------------------
| Closing price, EUR | 2.96 |
--------------------------------------------------------------------------------
| Total turnover, EUR | 5,264,636 |
--------------------------------------------------------------------------------
| Total turnover, volume | 1,899,997 |
--------------------------------------------------------------------------------
| Market capitalisation value on 30 June 2007, EUR | 26,823,896 |
--------------------------------------------------------------------------------
LIQUIDITY PROVIDING FOR BIOHIT OYJ'S SHARE
During the reporting period, Biohit Oyj and Swedish Remium AB have signed a
market making agreement that follows the guidelines set by the Helsinki Stock
Exchange on 5 April 2004.
Market making in accordance with the LP agreement has commenced on 1 June 2007.
The agreement will be in force initially for a fixed term of six (6) months and
thereafter until further notice, and the agreement's period of notice is one (1)
month.
The purpose of the contract is to secure the liquidity of Biohit Oyj shares and
to keep a narrow spread between the bids and offers for Biohit Oyj shares.
SHORT-TERM RISKS AND UNCERTAINTY FACTORS
Biohit has invested in the Asian market by, for instance, opening a production
unit in China in September 2006 and building a distribution network in both
China and Japan. However, the development of the distribution network with the
available resources has proven slower than anticipated. Therefore, there is a
risk that the profitability of Biohit's Asian units will not yet reach the level
expected by the company for 2007, which will also weaken the whole Group's
profitability. The company is attempting to minimise this risk by focusing on
the marketing of its products, especially in the Asian market, and by
intensifying co-operation with its local partners.
The market penetration of Biohit's diagnostic products has taken longer than
expected. If the sales growth of these products slackens, this will weaken the
profitability of the whole Group in the future. In the USA, sales growth has
been hampered by the fact that GastroPanel's Pepsinogen I and II tests have yet
to obtain the required Food and Drug Administration (FDA) approval. Biohit
expects this approval at the end of 2007. Any delay in the approval granting
process or a refusal to approve the product might weaken the product's sales
prospects and have a negative effect on the net sales development of the entire
diagnostics business. The company is attempting to minimise this risk by working
in close co-operation with its US and Finnish scientific advisors and by
actively keeping in touch with the FDA.
Another factor affecting Biohit's business profitability is exchange rate
fluctuations. The strong upward trend of the euro weakened the company's profits
in early 2007 and it is possible that this development will continue into the
latter half of the year. The company is attempting to hedge against this
exchange rate risk by making its purchases in non-euro currencies.
OUTLOOK FOR 2007
Biohit expects its net sales to grow this year compared to 2006. However, the
decline in growth which began in April-June may continue during the latter part
of 2007.
The development of net sales in liquid handling products depends primarily on
progress in building a distribution network in Asia and on the launch of
co-operation with VWR in Europe. With respect to diagnostic products, the
development of net sales is affected by the progress achieved in distributor
co-operation in Asia, the progress of the FDA approval process and the
successful launch of the GastroView product in the UK (www.gastroprofile.com,
www.gastroview.com).
Biohit expects its full-year profit to remain below the level achieved in 2006.
This is attributable to the slower than expected growth in net sales , the
increase in fixed and financial costs and the currency impact.
This interim report has been prepared in accordance with the IAS 34 standard.
The figures in the interim report have not been audited.
CONSOLIDATED INCOME STATEMENT
--------------------------------------------------------------------------------
| | 1-6 | 1-6 | Change | Change | 1-12 |
| | 2007 | 2006 | | | 2006 |
--------------------------------------------------------------------------------
| | MEUR | MEUR | MEUR | % | MEUR |
--------------------------------------------------------------------------------
| Net sales | 16.1 | 15.2 | 0.9 | 6 | 31.4 |
--------------------------------------------------------------------------------
| Other operating income | 0.0 | 0.0 | 0.0 | 121 | 0.0 |
--------------------------------------------------------------------------------
| Change in inventories of | 0.7 | 0.6 | 0.1 | 21 | 0.9 |
| finished goods and work in | | | | | |
| progress | | | | | |
--------------------------------------------------------------------------------
| Materials and services | -3.7 | -3.5 | 0.2 | 6 | -7.4 |
--------------------------------------------------------------------------------
| Employee benefit expenses | -7.2 | -6.5 | 0.8 | 12 | -12.7 |
--------------------------------------------------------------------------------
| Depreciation | -0.9 | -0.9 | 0.0 | 1 | -1.8 |
--------------------------------------------------------------------------------
| Other operating expenses | -5.6 | -5.3 | 0.3 | 6 | -10.6 |
--------------------------------------------------------------------------------
| Operating result | -0.7 | -0.3 | -0.4 | -108 | -0.1 |
--------------------------------------------------------------------------------
| Financial income | 0.0 | 0.1 | -0.1 | -63 | 0.1 |
--------------------------------------------------------------------------------
| Financial expenses | -0.3 | -0.3 | 0.0 | 1 | -0.6 |
--------------------------------------------------------------------------------
| Result before taxes | -1.0 | -0.6 | -0.4 | -74 | -0.6 |
--------------------------------------------------------------------------------
| Income taxes | 0.2 | -0.1 | -0.3 | -281 | -0.2 |
--------------------------------------------------------------------------------
| Result for the period | -0.8 | -0.6 | -0.1 | -22 | -0.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 1-6 2007 | 1-6 2006 | 1-12 2006 |
--------------------------------------------------------------------------------
| MEUR | MEUR | MEUR |
--------------------------------------------------------------------------------
| Earnings per share calculated from | |
| earnings attributable to equity holders | |
| of the parent company | |
--------------------------------------------------------------------------------
| Earnings per share, undiluted*, EUR | -0.06 | -0.05 | -0.06 |
--------------------------------------------------------------------------------
*) The convertible bond is not dilutive in respect of earnings per share in the
financial years 2006 and 2007.
--------------------------------------------------------------------------------
| | 4-6 2007 | 4-6 2006 | Change | Change |
--------------------------------------------------------------------------------
| | MEUR | MEUR | MEUR | % |
--------------------------------------------------------------------------------
| Net sales | 7.9 | 7.6 | 0.3 | 5 |
--------------------------------------------------------------------------------
| Other operating income | 0.0 | 0.0 | 0.0 | 217 |
--------------------------------------------------------------------------------
| Change in inventories of | 0.2 | 0.3 | -0.1 | -24 |
| finished goods and work in | | | | |
| progress | | | | |
--------------------------------------------------------------------------------
| Materials and services | -1.8 | -1.7 | 0.1 | 8 |
--------------------------------------------------------------------------------
| Employee benefit expenses | -3.8 | -3.3 | 0.5 | 14 |
--------------------------------------------------------------------------------
| Depreciation | -0.5 | -0.4 | 0.0 | 1 |
--------------------------------------------------------------------------------
| Other operating expenses | -3.0 | -2.7 | 0.3 | 10 |
--------------------------------------------------------------------------------
| Operating result | -0.9 | -0.3 | -0.6 | -192 |
--------------------------------------------------------------------------------
| Financial income | 0.0 | 0.1 | 0.0 | -68 |
--------------------------------------------------------------------------------
| Financial expenses | -0.2 | -0.2 | 0.0 | -3 |
--------------------------------------------------------------------------------
| Result before taxes | -1.0 | -0.4 | -0.6 | -149 |
--------------------------------------------------------------------------------
| Income taxes | 0.2 | 0.0 | -0.2 | -1,832 |
--------------------------------------------------------------------------------
| Result for the period | -0.8 | -0.4 | -0.4 | -97 |
--------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET
--------------------------------------------------------------------------------
| | 30.6.2007 | 30.6.2006 | 31.12.2006 |
--------------------------------------------------------------------------------
| | MEUR | % | MEUR | % | MEUR | % |
--------------------------------------------------------------------------------
| ASSETS | | | | | | |
--------------------------------------------------------------------------------
| NON-CURRENT ASSETS | | | | | | |
--------------------------------------------------------------------------------
| Goodwill | 2.6 | 9 | 2.6 | 9 | 2.6 | 10 |
--------------------------------------------------------------------------------
| Intangible assets | 1.7 | 6 | 1.5 | 5 | 1.6 | 6 |
--------------------------------------------------------------------------------
| Tangible assets | 7.2 | 24 | 7.0 | 25 | 6.9 | 25 |
--------------------------------------------------------------------------------
| Receivables | 0.0 | 0 | 0.1 | 0 | 0.0 | 0 |
--------------------------------------------------------------------------------
| Deferred tax assets | 2.4 | 8 | 2.0 | 7 | 2.1 | 8 |
--------------------------------------------------------------------------------
| Total non-current | 13.9 | 47 | 13.2 | 47 | 13.2 | 48 |
| assets | | | | | | |
--------------------------------------------------------------------------------
| CURRENT ASSETS | | | | | | |
--------------------------------------------------------------------------------
| Inventories | 6.2 | 21 | 5.4 | 19 | 5.8 | 21 |
--------------------------------------------------------------------------------
| Trade and other | 6.6 | 22 | 6.7 | 24 | 6.7 | 24 |
| receivables | | | | | | |
--------------------------------------------------------------------------------
| Financial assets | 1.5 | 5 | 1.8 | 6 | 0.9 | 3 |
| recognised at fair | | | | | | |
| value through profit or | | | | | | |
| loss | | | | | | |
--------------------------------------------------------------------------------
| Cash and cash | 1.3 | 5 | 0.9 | 3 | 0.9 | 3 |
| equivalents | | | | | | |
--------------------------------------------------------------------------------
| Total current assets | 15.7 | 53 | 14.8 | 53 | 14.1 | 52 |
--------------------------------------------------------------------------------
| TOTAL ASSETS | 29.5 | 100 | 28.0 | 100 | 27.3 | 100 |
--------------------------------------------------------------------------------
| LIABILITIES | | | | | | |
--------------------------------------------------------------------------------
| Equity attributable to | | | | | | |
| the equity holders of | | | | | | |
| the parent company | | | | | | |
--------------------------------------------------------------------------------
| Share capital | 2.2 | 7 | 2.2 | 8 | 2.2 | 8 |
--------------------------------------------------------------------------------
| Share premium fund | 0.2 | 1 | 12.4 | 44 | 0.2 | 1 |
--------------------------------------------------------------------------------
| Fund for investments of | 12.2 | 41 | 0.0 | 0 | 12.2 | 45 |
| non-restricted equity | | | | | | |
--------------------------------------------------------------------------------
| Retained earnings | -2.1 | -7 | -1.1 | -4 | -1.2 | -4 |
--------------------------------------------------------------------------------
| Total equity | 12.6 | 43 | 13.5 | 48 | 13.4 | 49 |
--------------------------------------------------------------------------------
| NON-CURRENT LIABILITIES | | | | | | |
--------------------------------------------------------------------------------
| Deferred tax | 0.1 | 0 | 0.1 | 0 | 0.1 | 0 |
| liabilities | | | | | | |
--------------------------------------------------------------------------------
| Pension obligations | 0.1 | 0 | 0.1 | 0 | 0.0 | 0 |
--------------------------------------------------------------------------------
| Total interest-bearing | 8.0 | 27 | 7.2 | 26 | 6.3 | 23 |
| liabilities | | | | | | |
--------------------------------------------------------------------------------
| Other liabilities | 1.0 | 3 | 1.1 | 4 | 1.0 | 4 |
--------------------------------------------------------------------------------
| Total non-current | 9.2 | 31 | 8.5 | 30 | 7.4 | 27 |
| liabilities | | | | | | |
--------------------------------------------------------------------------------
| CURRENT LIABILITIES | | | | | | |
--------------------------------------------------------------------------------
| Trade payables | 2.4 | 8 | 2.2 | 8 | 1.8 | 7 |
--------------------------------------------------------------------------------
| Provisions | 0.1 | 0 | 0.0 | 0 | 0.1 | 0 |
--------------------------------------------------------------------------------
| Total interest-bearing | 1.6 | 5 | 0.8 | 3 | 1.4 | 5 |
| liabilities | | | | | | |
--------------------------------------------------------------------------------
| Other liabilities | 3.6 | 12 | 2.9 | 11 | 3.2 | 12 |
--------------------------------------------------------------------------------
| Total current | 7.7 | 26 | 6.0 | 21 | 6.5 | 24 |
| liabilities | | | | | | |
--------------------------------------------------------------------------------
| Total liabilities | 16.9 | 57 | 14.5 | 52 | 13.9 | 51 |
--------------------------------------------------------------------------------
| TOTAL EQUITY AND | 29.5 | 100 | 28.0 | 100 | 27.3 | 100 |
| LIABILITIES | | | | | | |
--------------------------------------------------------------------------------
CONSOLIDATED CASH FLOW STATEMENT
--------------------------------------------------------------------------------
| | 1-6/2007 | 1-6/2006 | 1-12/2006 |
--------------------------------------------------------------------------------
| | MEUR | MEUR | MEUR |
--------------------------------------------------------------------------------
| CASH FLOW FROM OPERATING | | | |
| ACTIVITIES | | | |
--------------------------------------------------------------------------------
| Result before taxes | -1.0 | -0.6 | -0.6 |
--------------------------------------------------------------------------------
| Adjustments | 1.2 | 1.0 | 2.2 |
--------------------------------------------------------------------------------
| CHANGE IN WORKING CAPITAL | 0.5 | -0.7 | -0.9 |
--------------------------------------------------------------------------------
| Interest and other financial | -0.1 | -0.1 | -0.4 |
| items paid | | | |
--------------------------------------------------------------------------------
| Interest received | 0.0 | 0.1 | 0.1 |
--------------------------------------------------------------------------------
| Income taxes paid | -0.3 | 0.0 | -0.2 |
--------------------------------------------------------------------------------
| Net cash flow from operating | 0.4 | -0.3 | 0.2 |
| activities | | | |
--------------------------------------------------------------------------------
| CASH FLOW FROM INVESTING | | | |
| ACTIVITIES | | | |
--------------------------------------------------------------------------------
| Investments in tangible and | -1.1 | -0.9 | -1.8 |
| intangible assets | | | |
--------------------------------------------------------------------------------
| Investments and capital gains | -0.7 | 1.6 | 2.6 |
| from investments in funds and | | | |
| deposits, net | | | |
--------------------------------------------------------------------------------
| Net cash flow from investments | -1.8 | 0.8 | 0.8 |
--------------------------------------------------------------------------------
| CASH FLOW FROM FINANCING | | | |
| ACTIVITIES | | | |
--------------------------------------------------------------------------------
| Proceeds from loans | 2.3 | 0.1 | 0.1 |
--------------------------------------------------------------------------------
| Repayment of loans | -0.5 | -0.4 | -1.0 |
--------------------------------------------------------------------------------
| Net cash flow from financing | 1.8 | -0.3 | -0.9 |
| activities | | | |
--------------------------------------------------------------------------------
| Increase (+) / decrease (-) in | 0.5 | 0.2 | 0.1 |
| cash and cash equivalents | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents at | 0.9 | 0.7 | 0.7 |
| beginning of period | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents at | 1.3 | 0.9 | 0.9 |
| end of period | | | |
--------------------------------------------------------------------------------
STATEMENT OF CHANGES IN EQUITY
Consolidated statement of changes in equity on 30 June 2007
--------------------------------------------------------------------------------
| MEUR | Share | Share | Trans- | Fund for | Earnings | Equity |
| | capital | premium | lation | investments | | |
| | | fund | diff. | of | | |
| | | | | non-restric | | |
| | | | | ted equity | | |
--------------------------------------------------------------------------------
| Equity on 1 | 2.2 | 0.2 | 0.1 | 12.2 | -1.3 | 13.4 |
| Jan 2007 | | | | | | |
--------------------------------------------------------------------------------
| Translation | | | 0.0 | | | 0.0 |
| differences | | | | | | |
--------------------------------------------------------------------------------
| Result for | | | | | -0.8 | -0.8 |
| the period | | | | | | |
--------------------------------------------------------------------------------
| Equity on 30 | 2.2 | 0.2 | 0.1 | 12.2 | -2.1 | 12.6 |
| June 2007 | | | | | | |
--------------------------------------------------------------------------------
Consolidated statement of changes in equity on 30 June 2006
--------------------------------------------------------------------------------
| MEUR | Share | Share | Trans-| Earnings | Equity |
| | capital | premium | lation | | |
| | | fund | diff.| | |
--------------------------------------------------------------------------------
| Equity on 1 Jan 2006 | 2.2 | 13.0 | 0.2 | -1.1 | 14.3 |
--------------------------------------------------------------------------------
| Transfer from share | | -0.6 | | 0.6 | 0.0 |
| premium fund | | | | | |
--------------------------------------------------------------------------------
| Translation | | | -0.1 | | -0.1 |
| differences | | | | | |
--------------------------------------------------------------------------------
| Result for the | | | | -0.6 | -0.6 |
| period | | | | | |
--------------------------------------------------------------------------------
| Equity on 30 June | 2.2 | 12.4 | 0.1 | -1.2 | 13.5 |
| 2006 | | | | | |
--------------------------------------------------------------------------------
NOTES
ACCOUNTING PRINCIPLES FOR THE INTERIM REPORT
This interim report has been prepared in accordance with the IAS 34 standard.
Biohit Oyj has applied the same accounting principles in preparing this interim
report as for its financial statements of 2006. New financial statement
standards, amendments and interpretations were published and became effective as
of 1 January 2007. They are presented in detail in the financial statements for
2006. Their adoption did not cause any changes in financial statement accounting
policy that would have required a retroactive change in the comparison
information presented.
All the figures in the interim report have been rounded up or down, due to which
the sums of figures may deviate from the sum total presented.
The figures in the interim report have not been audited.
FIGURES BY BUSINESS SEGMENT
Group net sales by business segment
--------------------------------------------------------------------------------
| | 1-6 2007 | 1-6 2006 | Change | Change |
--------------------------------------------------------------------------------
| | MEUR | MEUR | MEUR | % |
--------------------------------------------------------------------------------
| Liquid handling | 15.3 | 14.4 | 0.9 | 6 |
--------------------------------------------------------------------------------
| Diagnostics | 0.8 | 0.8 | 0.0 | -3 |
--------------------------------------------------------------------------------
Group operating result by business segment
--------------------------------------------------------------------------------
| | 1-6 2007 | 1-6 2006 | Change | Change |
--------------------------------------------------------------------------------
| | MEUR | MEUR | MEUR | % |
--------------------------------------------------------------------------------
| Liquid handling | 0.8 | 0.9 | -0.1 | -11 |
--------------------------------------------------------------------------------
| Diagnostics | -1.5 | -1.2 | -0.3 | 20 |
--------------------------------------------------------------------------------
INVESTMENTS AND PERSONNEL
--------------------------------------------------------------------------------
| | 30.6.2007 | 30.6.2006 | Change | Change-% | 31.12.2006 |
--------------------------------------------------------------------------------
| Investments, | 1.3 | 1.1 | 0.3 | 24 | 1.9 |
| gross, MEUR | | | | | |
--------------------------------------------------------------------------------
| % of net sales | 8 | 7 | | | 6.1 |
--------------------------------------------------------------------------------
| Average number | 346 | 293 | 53 | 18 | 310 |
| of employees | | | | | |
--------------------------------------------------------------------------------
At the end of the reporting period, Biohit Group's commitments for the
acquisition of tangible fixed assets totalled EUR 0.1 million.
RELATED PARTY TRANSACTIONS
There have been no noticeable changes in related party transactions in 2007.
COLLATERAL, CONTINGENT LIABILITIES AND OTHER COMMITMENTS
--------------------------------------------------------------------------------
| Liabilities for which | 30.6.2007 | 30.6.2006 | 31.12.2006 |
| mortgages have been lodged | | | |
| as collateral | | | |
--------------------------------------------------------------------------------
| | MEUR | MEUR | MEUR |
--------------------------------------------------------------------------------
| Loans from financial | 2.3 | 1.9 | 1.7 |
| institutions | | | |
--------------------------------------------------------------------------------
| Corporate mortgages | 1.6 | 1.8 | 1.6 |
--------------------------------------------------------------------------------
| Mortgages on real estate | 1.9 | 1.4 | 1.4 |
--------------------------------------------------------------------------------
| Other long-term liabilities | 0.4 | 0.5 | 0.4 |
--------------------------------------------------------------------------------
| Mortgages on real estate | 0.8 | 0.8 | 0.8 |
--------------------------------------------------------------------------------
| Lease agreements | 6.1 | 4.7 | 4.5 |
--------------------------------------------------------------------------------
| Corporate mortgages | 0.2 | 0.2 | 0.2 |
--------------------------------------------------------------------------------
KEY RATIOS
--------------------------------------------------------------------------------
| | 30.6.2007 | 30.6.2006 | 31.12.2006 |
--------------------------------------------------------------------------------
| Equity ratio % | 42.9 | 48.5 | 49.4 |
--------------------------------------------------------------------------------
| Earnings per share, EUR | -0.06 | -0.05 | -0.06 |
--------------------------------------------------------------------------------
| Shareholder's equity per | 0.98 | 1.04 | 1.04 |
| share, EUR | | | |
--------------------------------------------------------------------------------
| Average number of shares | 12,937,627 | 12,937,627 | 12,937,627 |
--------------------------------------------------------------------------------
| Number of shares at the end | 12,937,627 | 12,937,627 | 12,937,627 |
| of period | | | |
--------------------------------------------------------------------------------
Helsinki, 3 August 2007
Board of Directors of Biohit Oyj
Further information:
Osmo Suovaniemi, M.D., Ph.D., Professor
President & CEO
Tel: +358-9-773 861
Mobile: +358-40-745 5605
Email: osmo.suovaniemi@biohit.com
Distribution:
Helsinki Exchanges
Financial Supervisory Authority
Press
http://www.biohit.com
Further Information
GastroPanel and GastroView examinations provide reliable information on whether
the gastric mucosa of a person suffering from dyspeptic problems or of an
asymptomatic person seeking a medical examination is healthy or not. If the
gastric mucosa is healthy, the patient's stomach problems may be caused by a
disease other than one of the gastric mucosa. In such a case, the problems are
often related to the large intestine.
The GastroPanel and GastroView examinations, the latter being intended for
round-the-clock use without the need to fast before the biopsy, provide a
reliable diagnosis of an H. pylori infection, mildly symptomatic or most often
asymptomatic atrophic gastritis and the associated risks (gastric cancer, peptic
ulcer disease and deficiencies in vitamin B12, iron and calcium) as well as
risks related to the reflux disease (erosive esophagitis and Barrett's
esophagus, which may lead to esophageal cancer).
Diseases related to atrophic gastritis are increasing as the population ages.
This applies particularly to gastric cancer and vitamin B12 deficiency which is
becoming a national disease and may lead, for instance, to dementia, depression
and damage to the peripheral nervous system (www.b12.com), and an increase of
the level of homocysteine in the body which, in turn, is believed to be a risk
factor in atherosclerosis as well as heart attacks and strokes
(www.homocysteine.com, see, for instance, 'Geography'). A calcium deficiency may
lead to osteoporosis, which increases the risk of hip fractures, among other
things. Similarly to atrophic gastritis, excessive use of PPI medication may
lead to an anacidic stomach and the resultant deficiencies in iron and calcium.
Furthermore, oral bacteria are able to live in an anacidic stomach and produce
carcinogenic acetaldehyde from carbohydrates contained in food (see Biohit Oyj's
stock exchange release from 3 Nov 2006, chapter ”The elimination of carcinogenic
acetaldehyde from foodstuffs and the gastrointestinal tract”).
The 13C urea breath test and the stool antigen test, still extensively used in
the diagnostics of dyspepsia and H. pylori infections, provide no information
other than a diagnosis of a possible H. pylori infection. Furthermore, the test
results are unreliable, particularly in those cases (for instance, atrophic
gastritis and the associated risks, such as gastric cancer) in which the correct
diagnosis of an H. pylori infection, which often causes atrophic gastritis, is
of the utmost importance to patient safety. In as many as 40-50 per cent of
cases, these tests do not identify an H. pylori infection if the patient has the
resultant atrophic gastritis, bleeding peptic ulcers (gastric or duodenal ulcer)
or MALT lymphoma, or if the patient is taking antibiotics or PPIs (proton pump
inhibitors).
In order to avoid possible treatment errors, it is now of utmost importance that
doctors obtain reliable information on the unreliability and insufficiency of
the 13C urea breath test and the stool antigen test. The use of these tests, and
diagnoses and treatments based on their results, may cause delays in the
diagnosis and treatment of potentially severe illnesses (atrophic gastritis and
the possibly resultant gastric cancer, peptic ulcers etc.). In order to avoid
possible treatment errors and unnecessary costs, it would now be eminently
justifiable to stop using the 13C urea breath test and the stool antigen test as
the preferred examinations specified in the Finnish Current Care guidelines for
the diagnosis and treatment of dyspepsia and H. pylori infections and replace
them with GastroPanel and GastroView examinations, which provide ample and
reliable information. (www.gastropanel.net, www.gastroview.com).
The blood-sample based GastroPanel and GastroView examination tests (Pepsinogen
I and II, H. pylori IgA & IgG antibodies and Gastrin-17, which is not included
in the GastroView examination) have long been reimbursed in accordance with the
reimbursement rates of Kela (the Social Insurance Institution of Finland). These
examinations enhance the early diagnosis of, for instance, the mild or often
asymptomatic atrophic gastritis, the main risk factor in gastric cancer, thus
improving patient safety and reducing the frequency of unnecessary examinations
(gastroscopy) and treatments (continuous suppression of gastric acid release
with PPI medication and/or unnecessary anti-Helicobacter pylori treatments).
(Further information: www.biohit.com/diagnostics -> Literature)
Literature
1. Gatta L, Perna F, Ricci C, et al. Effect of proton pump inhibitors and
antacid therapy on 13C urea breath test and stool test for Helicobacter pylori
infection. Am J Gastroenterol 2004;99:823-829
2. Graham KS, Graham DY. Contemporary Diagnosis and Management of H.
pylori - Associated Gastrointestinal Diseases, Published by Handbooks in Health
Care Co, Newtown, Pennsylvania, USA, 2002
3. Graham DY, Opekun AR, Hammoud F, Yamaoka Y, Reddy R, Osato MS, El-Zimaity
HM. Studies regarding the mechanism of false negative urea breath tests with
proton pump inhibitors. Am J Gastroenterol. 2003;98:1005-9.
4. Kokkola A, Rautelin H, Puolakkainen P, et al. Positive result in serology
indicates active Helicobacter pylori infection in patients with atrophic
gastritis. J Clin Microbiol 1998; 36 (6):1808-10148.
5. Kokkola A, Rautelin H, Puolakkainen P et al. Diagnosis of Helicobacter
pylori- infection in Patients with Atrophic Gastritis: Comparison of
Histology, 13C Urea Breath Test, and serology. Scand J Gastroenterol 2000;
25:138-141
6. Kokkola A., Rautelin H, Puolakkainen P, Sipponen P, Färkkilä M, Kosunen TU.
Diagnosisi of Helicobacter pylori infection in Patients with Atrophic Gastritis:
Comparison of Histology, 13C Urea Breath Test, and serology. Scand J
Gastroenterol 2000:25:138-141. ”Conclusions: H. pylori infection would have been
missed in most patients with atrophic gastritis without the analysis of H.
pylori antibodies. Therefore, in patients with atrophic gastritis, the use of
serology is encouraged in diagnosing H. pylori infection.”
7. Kokkola A, Rautelin H, Puolakkainen P, Sipponen P, Färkkilä M, Haapiainen R,
Kosunen TU. Positive result in serology indicates active Helicobacter pylori
infection in patients with atrophic gastritis. J Clin Microbiol. 1998; 36 (6)
1808 -10. -”In patients with atrophic corpus gastritis, positive serology
results may indicate an ongoing infection in spite of negative 13C-UBT and
histology results.”
8. Kosunen TU. Antibody titers in Helicobacter pylori infection: implications in
the follow-up of antimicrobial therapy. Ann Med 1995; 27:605-607
9. Jaskowski TD, et al. Immunoglobulin A antibodies to Helicobacter pylori. J
Clin Microbiol 1997; 35:2999-3000.
10. Väkeväinen, S., Tillonen, J., Agarwal, D., Srivastava, N. & Salaspuro, M.:
High salivary acetaldehyde after a moderate dose of alcohol in ALDH2-deficient
subjects: strong evidence for the local carcinogenic action of acetaldehyde.
Alcohol.Clin.Exp.Res. 25: 873-877, 2000
11. Väkeväinen, S., Tillonen, J., Salaspuro, M., Jousimies-Somer, H., Nuutinen,
H., Färkkilä.M.Hypochlorhydria induced by a proton pump inhibitor leads to
intragastric microbial production of acetaldehyde from ethanol. Aliment.
Pharmacol.Ther 14: 1511-1518, 2000
12. Väkeväinen, S., Mentula, S., Nuutinen, H., Salmela, K., Jousimies-Somer, H.,
Färkkilä, M. & Salaspuro, M. et al. Ethanol-derived microbial production of
carcinogenic acetaldehyde in achlorhydric atrofic gastritis.
Scand.J.Gastroeterol 37: 648-655, 2002
13. Yang YX, Lewis JD, Epstein S, et al. Long-term proton pump inhibitor therapy
and risk of hip fracture. JAMA 2006; 296:2947-53
14. Sharma VR, Brannon MA, Carloss EA. South Med J. 2004 Sep; 97(9): 887 - 9.
15. Sipponen P, Laxen F, Huotari K, et al. Prevalence of Low Vitamin B12 and
High Homocysteine in Serum in an Elderly Male Population: Association with
Atrophic Gastritis and Helicobacter pylori infection, Scand J Gastroenterol
2003; 38:1209-1216
