Hurricane and fire related shutdowns have cost Patheon $15m in lost revenue in Q4

14-Nov-2016 - Last updated on 14-Nov-2016 at 11:19 GMT

Image: iStock/ronniechua

Related tags North carolina South carolina

Recent facility closures due to a hurricane and a power outage have cost Patheon around $15m in lost revenues, the firm says.

Last month, contract development and manufacturing organisation (CDMO) Patheon announced two of its facilities – Greenville in North Carolina, and Florence in South Carolina - were forced to temporarily halt operations after Hurricane Matthew swept across the US southeast causing flooding and power outages.

This came weeks after production stopped at the firm’s Manati, Puerto Rico drug product services facility following a fire at a power plant on the island resulting in the loss of power.

Now ahead of reporting its FY2016 Q4 results, the company has announced revenues will be impacted by the closures by around $15m, while adjusted EBITDA will fall by $12m.

The firm also said in an SEC filing that all three facilities have resumed normal operations, and there was no damage to any of the sites.

The clarity was welcomed by investors, with Baird Equity Research analyst Eric Coldwell noting the impact was similar to his preliminary thinking “and slightly better than some investor expectations.”

William Blair’s John Kruger maintained his 2017 and 2018 estimate and his ‘outperform’ rating for the CDMO:

“We do not expect the interruptions to have an impact on numbers going forward. The company reported that there was no damage to the facilities, all are back on line, and no impact on fiscal 2017 is anticipated.”