AFT Pharmaceuticals guides to upper end of forecast as coronavirus boosts sales

AFT Pharmaceuticals is reporting brisk demand for its cold and influenza-related medicines amid the unfolding coronavirus crisis, although that may not be enough to fully offset the supply-chain disruptions it is grappling with.

"As news of the covid-19 outbreak emerged at the start of this year, we moved quickly to significantly build stocks of our key medicines in Australasia and we have been rewarded for this foresight," managing director Hartley Atkinson said in a statement.

"By way of example, we sold $1.2 million of vitamin C lipo-sachets in New Zealand over three days alone" and that equaled sales in the previous 12 months, Atkinson said.

The company said its over-the-counter and hospital businesses have seen strong demand for its injectable antibiotics, analgesics including its patented Maxigesic pain relief products, and supplements such as vitamin C.

Demand internationally has also been strong and the company said it was working with its international partners to ensure an uninterrupted supply to its global customer base.

"This is not without challenges, given disruption to global trade routes caused by the virus. However, we are confident that any financial impact on the global business could in part be offset by our local sales gains," the company said.

Atkinson said because the sales uplift has come late in the financial year, he is maintaining guidance for operating profit for the year ending this month at between $18.8m and $21.8m, "although we now expect a result that is at the mid to upper end of this range."

"AFT is monitoring developments related to the covid-19 outbreak closely. At present, we are unable to say with any certainty whether demand will be sustained beyond the end of the current financial year and, if so, for how long," he said.

"Importantly, we have a diverse range of products from injectable antibiotics to patented analgesic and eyecare products. We will update the market as necessary."

Atkinson told BusinessDesk all his company's products are manufactured offshore in China, India, Malaysia, Europe and North America.

AFT normally has about three months' supply but in January had lifted that to five or six months supply of some products.

The company briefly ran out of vitamin C but was able to restock quickly, he said.

The company's best-selling product is made in Germany by robots. "One of the good things about that is a robot doesn't get covid-19."

The company's supplier in China is in the city of Jinan, about seven hour's travel north of Hubei province where the virus first emerged, but AFT hadn't suffered any supply problems, Atkinson said.

On a day in which the benchmark S&P/NZX 50 Index is down 1.5 per cent, AFT shares rose 10 cents, or 2.8 per cent, to $3.70. They have gained more than 75 per cent in the past 12 months.