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Business News

Pharmadeko Plc has been hit hard by the codeine ban

Pharmadeko Plc has recorded a N110 million loss in the first quarter eneded March 2019, due to the fallout of a ban on codeine cough syrups.

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Pharma Deko Plc, Pharma Deko Plc records 1.16% increase in 2020 9M revenues

The abrupt ban on the sale of codeine-containing cough syrups by the Federal Government last year has hit some pharmaceutical firms hard.

Pharmadeko Plc, in its financial statements for the first quarter ended March 2019, recorded a N110 million loss, compared to N15.7 million profit in Q1 2018.

In the statement, the company indirectly attributed the poor results to the codeine ban.

“The company posted a loss of N110 million due to working capital deficiency as company funds are tied down as a result of the temporary suspension placed on cough syrup containing codeine by the Federal government.”

As a result of the ban:

  • Finished goods valued at N120 million are tied down in the company’s warehouse.
  • Receivable of N72.3 million yet to be collected as the product can not be sold, in addition to finished goods on hold at the distributorship warehouse.
  • Materials worth over N60.4 million are tied down in the company’s warehouse.

The company, however, expressed some optimism that compensation from the Federal Government would be paid soon.

“We are however cautiously optimistic that the Federal Government would FULFIL the proposed compensation soonest.”

Why was codeine banned? The Federal Government took the step following a documentary by the British Broadcasting Service (BBC), which showed massive abuse of the drugs, and seemingly lax sale policies by some pharmaceutical companies in the country.

Prior to the ban, Pharmadeko Plc had been producing Parklin Cough Syrup, a product which in its FY 2018 results, it stated was its flagship.

The sad tales may continue: Second quarter results by the firm may also take the same pattern, seeing as no concrete plan was stated on how working capital would be raised. Waiting on the Federal Government for compensation is an unrealistic strategy, especially considering the the President yet to assent to the 2019 budget.

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About the firm: The company was incorporated in 1967 as Parke-Davis and Co Limited. In 1980, its name was changed to Pharmadeko Limited, and then subsequently Pharmadeko Plc.

The company’s principal activities include the manufacturing, packaging and marketing of high quality pharmaceutical and consumer products. Popular brands produced include Sans Cream Soda and Brett Mouthwash.

Pharmadeko Plc closed at N1.50 in yesterday’s trading session on the Nigerian Stock Exchange (NSE).

Onome Ohwovoriole has a degree in Economics and Statistics from the University of Benin and prior to joining Nairametrics in December 2016 as Lead Analyst had stints in Publishing, Automobile Services, Entertainment and Leadership Training.He covers companies in the Nigerian corporate space, especially those listed on the Nigerian Stock Exchange (NSE).He also has a keen interest in new frontiers like Cryptocurrencies and Fintech. In his spare time, he loves to read books on finance, fiction as well as keep up with happenings in the world of international diplomacy.You can contact him via [email protected]

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Business

FG explains why Lagos-Ibadan rail line was not linked to the sea

The government in its explanation said that the delay was due to disruption by trucks going in and out of the port complex.

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FG needs $656 million to complete Lagos-Ibadan railway project – Amaechi, Nigeria loses N150 billion annually to shipping tariffs, Ibadan to Kano rail construction

The Federal Government has stated why the China Civil Engineering Construction Company (CCECC) Nigeria Limited could not link the final part of the Lagos-Ibadan rail line to the sea.

The government in its explanation said that it was due to disruption by trucks going in and out of the port complex.

According to a press statement signed by the Director, Press and Public Relations of the Federal Ministry of Transportation, Eric Ojiekwe, this disclosure was made by the Minister of Transportation, Rotimi Amaechi, while on a routine tour of the Lagos-Ibadan rail line project on Saturday, April 10, 2021.

The Minister pointed out that the original blueprint for the Lagos-Ibadan rail line project was not adhered to by CCECC Nigeria Limited and TEAM consortium and therefore warned that the master plan of the soon to commence Ibadan-Kano rail line project should not be changed.

The statement from the ministry partly reads, “The Nigerian Government has restated its commitment to connect the whole country by rail with the soon to commence Ibadan-Kano Standard Gauge Rail project.”

Amaechi forewarned that the master plan of the soon to commence project should not be changed as the original blueprint for the Lagos-Ibadan wasn’t adhered to by Messrs CCECC Nigeria and TEAM consortium. The Minister who rode the train from Ebute-Meta to the 8.72 km Apapa Port Spur line, informed the media that the inability of Messrs CCECC Nigeria to link the final part of the rail line down to the sea is rather due to disruption by trucks going in and out of the port complex.’’

The Minister had noted that the Federal Government has paid its share of the counterpart funding of the Ibadan-Kano rail line project and is waiting for China-Exim bank to ratify its side of the agreement for the project to commence.

He also advised the Nigerian Railway Corporation (NRC) to acquire more land around the train stations and the rail tracks for future development adding that this will be near impossible to do in the future as whatever space available now would have been taken over by businesses attracted to the rail line.

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In case you missed it

It can be recalled that full commercial train services commenced on the Lagos-Ibadan rail line after train operations commenced on December 7, 2020, with only Lagos, Ibadan and Abeokuta residents enjoying the train services.

This is because other minor and major stations along that route were yet to be completed.

 

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Manufacturing

Industrial Index loses -12.39 points, as BUA and Lafarge Cement shares top losers list

The NSE Industrials index lost 12.39 index points in the first trading week in the month of April.

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Manufacturing: Activity levels pick up albeit readings still below water

The Nigerian Stock Exchange Industrial Index at the close of trading activities for the first week in the month of April closed on a bearish note, following a 0.66% decrease in the shares of BUA CEMENT and Lafarge.

At the close of trading activities on the Nigerian Stock Exchange on the 9th of April 2021, the industrial index depreciated by 55.01 index points, to close lower at 1,928.18 index points for the week.

When compared to the overall performance of the market, the NSE Industrial index underperformed, noting that the NSE All-Share Index and Market Capitalization depreciated by 0.66% to close the week at 38,866.39 and N20.3350 trillion respectively.

READ: COVID-19, VAT, FX scarcity adversely impacted our operations in 2020 – Nigerian Breweries boss says

What you should know

The NSE Industrial Index was designed to provide an investable benchmark to capture the performance of the Industrial Sector. It comprises the most capitalized and liquid companies in the industrial sector and is based on the market capitalization methodology.

The index tracks the performance of ten industrial companies on the Nigerian Stock Exchange which includes Dangote, BUA, and Lafarge Cement.

The overall performance of the companies for the week was bearish, as the index closed on a negative note driven by the decrease in the share price of BUA Cement and Lafarge.

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MEYER (19.51) was the only gainer for the week, while BUACEMENT (-1.09%) and LAFARGE WAPCO (-3.00%) were the only losers for the week.

GAINER

  • MEYER up by19.51% to close at N0.49.

LOSER

  • WAPCO down by -3.00% to close at N21.00.
  • BUACEMENT down by -1.09% to close at N72.70.

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