December 4, 2017 / 7:13 AM / a year ago

Denmark's Alk Abello suspends dividend to support North America investment

(Reuters) - Danish pharma company Alk Abello (ALKb.CO) said on Monday it would invest 1 billion Danish crowns (118 million pounds) in its North America business, a move that is expected put a lid on earnings and revenue growth in the near term.

To support the investment, the company also plans to temporarily suspend its dividend. The news sent its shares sharply lower and they were last down 9 percent at 825 crowns, the lowest since February 2016.

The company aims to expand its allergy immunotherapy business in North America, which is world’s largest allergy market.

The pharma products maker has already an established organisation in the region, where its revenue rose 17 percent year-on-year in the third quarter.

Alk Abello, which generates about one-fifth of its revenue in North America, said the expansion plan was expected to boost annual revenue growth to 10 percent or more after 2018.

With the expansion, the company expects margins to be in line with the wider speciality pharmaceutical industry in the longer run.

However, Alk Abello kept its guidance for 2017 unchanged and expects 2018 revenue to be slightly lower than in 2017.

Reporting by Boleslaw Lasocki; Editing by Edmund Blair and Mark Potter

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