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Why Australian Pharmaceutical Industries Ltd shares are falling on its half-year results

Credit: Priceline

Investors have reacted to disappointing results for the half-year to February 28 2018 for health and beauty services company Australian Pharmaceutical Industries Ltd (ASX: API), with its share price down 2% to $1.47 at the time of writing.

Australian Pharmaceutical Industries reported a drop in statutory NPAT of 14.4% to $24.9 million, with revenue flat at $2 billion and dividends maintained at 3.5c per share fully-franked.

Share prices for Australian Pharmaceutical have been volatile in the past 12 months, trending down from $2.03 at this time last year.

The company blames “suppressed retail conditions” for the drop in earnings, and similar conditions have affected others in the sector, with peer Mayne Pharma Group Ltd (ASX: MYX) reporting a 17% decrease in revenue, 82% drop in reported EBITDA and a net loss after tax of $174.2 million for the six months to December 31, 2018.

Elsewhere in the healthcare sector Ramsay Health Care Limited Fully Paid Ord. Shrs (ASX: RHC) shares could be in buy territory as Ramsay ploughs ahead on its global expansion strategy.

Healthscope Ltd (ASX: ASX: HSO) is also one to watch with its pathology services business going great guns.

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Motley Fool contributor Carin Pickworth has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Ramsay Health Care Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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