MEDILINES Distributors, Inc. said it aims to grow its dialysis business by entering the consumables segment.
The company said in an e-mailed statement on Thursday that it targets “to realize more value from its dominance of the sale of equipment.”
“To sustain our growth in the dialysis category, we are transforming this business line into a one-stop shop where our customers can buy not only the equipment, but also their regular supply of consumables,” Medilines Chair-man Virgilio B. Villar said.
“This will help grow our bottom line as consumables tend to have higher profit margins versus equipment,” he said.
Medilines said its net income posted a 16% compound annual growth rate (CAGR) to P103 million from 2018 to 2020, while its topline CAGR rose 11.9% to “just under” P1.5 billion.
In the first six months, Medilines scored a profit of P100 million, while its revenues stood at P815 million. The company said medical linear accelerators (LINACs) made up for over 60% of its sales in the first half.
Medilines is said to be the largest distributor of cancer therapy equipment in the country, with a market share of over 90% according to the independent study done by Ken Research, Ltd. Its market share of dialysis machines stood at 50%.
The study also said the cancer therapy equipment market stands to grow with an 18.8% CAGR until 2025. It will be driven by the continued investments into establishing cancer treatment centers.
Medilines is scheduled to list on the main board of the Philippine Stock Exchange on Dec. 7 under the ticker symbol “MEDIC.”
“Amid the volatility, it is a welcome development for the Philippine stock market to finally have a pure-play healthcare listed company as the companies in this sector are typically considered as defensive stocks,” said Ger-ry B. Valenciano, president and chief executive officer of PNB Capital and Investment Corp.
PNB Capital is the sole issue manager, lead underwriter, and sole bookrunner for Medilines’ initial public offering.
The company offered 550 million primary shares for P2.30 apiece, while 275 million shares were sold by Mr. Villar. Medilines will not receive proceeds from the sale of secondary shares.
According to its final prospectus dated Nov. 16, Medilines plans to use P696.8 million of net proceeds for debt repayment, while P507.7 million will be allocated as working capital to procure existing products and to fund the compa-ny’s foray into the medical consumables business.
“Crafting our product portfolio is at the heart of Medilines’ strategy that has brought us sustainable growth over the years,” Mr. Villar said.
“We focus on products with resilient demand while building our capabilities to dominate certain markets rather than chasing a hot selling item that everybody else is selling,” he added. — Keren Concepcion G. Valmonte