Annual Report 2025

MANAGEMENT DISCUSSION AND ANALYSIS 18 The United Laboratories International Holdings Limited Annual Report 2025 FINANCIAL REVIEW Financial Results For the year ended 31 December 2025, the Group recorded revenue of approximately RMB13,210.6 million, representing a year-on-year decrease of 4.0%. Gross profit was RMB5,514.1 million, representing a year-on-year decrease of 9.3%. EBITDA was approximately RMB3,247.2 million, representing a year-on-year decrease of 17.6%. Profit attributable to owners of the Company was RMB2,085.9 million, representing a year-on-year decrease of 21.6%. Earnings per share were RMB110.65 cents. The Board recommended the payment of a final dividend of RMB26 cents per share for the year ended 31 December 2025. Together with the interim dividend of RMB16 cents per share already paid, the total dividend for the year was RMB42 cents per share. During the year, segmental revenue (including inter-segment sales) of Intermediate products, Bulk medicine and Finished products decrease by 31.4%, decrease by 19.8% and increase by 41.7% respectively as compared with 2024. Segmental profit decreased by 79.4%, decrease by 53.4% and increase by 455.3% year-on-year respectively. The segment profit of Intermediate products and Bulk medicine decreased significantly are mainly due to decline in the market prices of the product. Significant increase in segment profit of finished products is mainly contributed from the license fee income from Novo Nordisk A/S. Optimising Financial Structure In terms of finance, the Group continuously optimised its financial structure to improve liquidity by adjusting the mix of onshore and offshore borrowings, balancing long-term and short-term borrowings to reduce the finance expenses and enhance financial flexibility and efficiency in the utilisation of funds and maintain robust financial position. During the year, the Group has used Renminbi as the main borrowing currency to reduce the risk of exchange rate fluctuation and finance costs. For the year ended 31 December 2025, the finance cost of the Group amounted RMB69.7 million, representing a year-on-year increase of 99.5%. Borrowing costs of RMB57.5 million (2024: RMB40.4 million) was capitalised during the year. As at 31 December 2025, the Group’s net bank balances and cash (after deducting borrowings and trade payables under supplier finance arrangement) amounted to RMB4,027.1 million (2024: RMB2,139.7 million). Liquidity and Financial Resources As at 31 December 2025, the Group had pledged bank deposits, bank balances and cash amounted to approximately RMB11,234.9 million (2024: RMB7,364.2 million). As at 31 December 2025, the Group had interest-bearing borrowings of approximately RMB4,979.3 million (2024: RMB3,138.3 million) denominated in Renminbi, of which borrowings of approximately RMB2,106.5 million with maturity within one year. Borrowings of approximately RMB525.5 million is on a fixed rate basis while the remaining balance of approximately RMB4,453.8 million is on a floating rate basis. The directors expect that all such borrowings will either be repaid by internally generated funds or rolled over upon maturity and provide sustainable funding to the Group’s operations.