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Shoppers Drug MartMARK BLINCH

Shoppers Drug Mart Corp. said Thursday that profit increased by 6.2 per cent to $145-million in the second quarter on a 5-per-cent sales increase to $2.4-billion.

Canada's largest drugstore operator by revenues and work force reported the growth in sales occurred in all regions of the country in the quarter ended June 19.

Profit in the quarter amounted to 66 cents per diluted share, up from 63 cents in the same quarter a year ago.

"We are pleased with our second quarter and year-to-date results, particularly in light of these challenging times for consumers and for the business of community pharmacy," Jurgen Schreiber, Shoppers' president and CEO, said in a news release.

Net earnings' growth was also helped by lower interest expense and by a reduction in the company's effective income tax rate, Shoppers said.

Shoppers said the second-quarter earnings came before the impact of any changes to provincial drug program reforms in Ontario, Quebec and B.C., some of which came into effect July 1.

The Ontario government has decided to cut the price of generic drugs paid for by the provincial drug plan and reduce the payments generic companies make to pharmacists - measures that will squeeze the industry's revenues.

In British Columbia, consumers will pay less for generic drugs as the cost drops to 35 per cent of brand-name versions over the next three years.

Quebec's drug policy requires the province to offer the lowest price in Canada.

Shoppers said prescription sales increased 5.1 per cent in the second quarter to $1.16-billion and accounted for 48.5 per cent of its sales. On a same-store basis, prescription sales increased 3.5 per cent.

In the second quarter of 2010, generic molecules represented 54.4 per cent of prescriptions dispensed compared with 52.7 per cent of prescriptions dispensed during the same period in 2009, Shoppers said.

Net earnings for the first half of the year increased 7.1 per cent to $260-million or $1.20 per share diluted from $243-million or $1.12 per share a year ago, the drug store chain said.

Sales for the first six months increased 5.3 per cent to $4.7-billion, with prescription sales up 5.7 per cent and front store sales up five per cent.

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