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Company Results

COVID-19 boosts Fidson Healthcare Plc’s Q2 2020 performance

A cursory analysis of the company’s result shows revenues got a boost, despite the challenges of Covid-19.

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Fidson Healthcare Plc,Fidson Healthcare Plc records 30.28% increase in 2020 9M revenues.

Fidson Healthcare Plc’s reported revenue for Q2 2020, increased year on year by 16.19%, from N3.83 billion to N4.45 billion.

Fidson Healthcare Plc is one of the leading pharmaceutical manufacturing companies in Nigeria. It is the second-largest pharmaceutical company in the country by Q2 2020 revenue, after GlaxoSmithKline Consumer Nigeria Plc – with a revenue of N5.44 billion.

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A cursory analysis of the company’s result shows revenues got a boost, despite the challenges of Covid-19. The lockdown affected the importation of products including some of its exports.  Yet revenue topped, thanks to an increase in sales of prescription drugs.  

Fidson has two key segments – Prescription (Ethical) drugs, and Over the counter sales. While revenues from over the counter sales were flat; the company booked revenues of N4.69 billion, compared with N3.7 billion in the period under review.  COVID-19 pandemic has largely boosted sales for most healthcare companies, as Nigerians rushed to buy immune boosters, thought to provide protection against the virus. 

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READ: Japan’s Ohara Pharmaceutical takes over 20% stake in Fidson Healthcare

Prescription drugs (Ethical drugs), also increased as a result of that, when compared with Q2 2019. The COVID-19 pandemic boosted the revenue of pharmaceutical companies, compared with previous periods as medicine sales surged.  

Apart from growing demand, the sector has also attracted interest from the CBN and the FG. Recently, The Central Bank of Nigeria (CBN), intervened in the sector through the provision of N100 billion credit, towards managing the pandemic, “providing opportunities to explore the development of new products,” according to the Chairman of the company, Mr. Segun Adebanji. 

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READ: Nigeria’s total foreign trade drops to N6.24 trillion in Q2 2020, export plunges by 52%

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Despite the interventions, the sector still faces a major challenge, as noted by the Pharmaceutical Manufacturers Group of the Manufacturers Association of Nigeria (PMG-MAN). The association said that local drug manufacturers may run out of business, as most raw materials and nearly finished pharmaceutical products are imported into the country. The Association submits that the reason for this is inconsistent government policies, which results in a lack of investment in the sector.    

Commenting on the surge in profits and reduction in certain costs, the Chairman of the company noted that various cost-cutting strategies were utilized in driving performance upward. The Earnings Per Share (EPS) of the company, grew by 433.33% from -6 kobo at the end of 2018, to 20 kobo at the end of 2019.  

READ: Fidson reports over 500% increase in profit for 2019

Fidson shares currently trade at N3.50 per unit. The share’s highest price in 52 weeks was N4.05 and the lowest was N2.21. A total volume of 1,132,011 units was sold in the last seven days trades. Shares outstanding is 2,086,360,250 units. As for GSK, a total volume of 2,882,893 units, was sold in the last seven days trades. Shares outstanding is 1,195,876,488 units.  

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Adeyemi holds a PhD in Accounting Sciences. He has worked in the Educational Sector and as an Independent Consultant.

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Companies

Cutix Plc forecasts N148 million profit in Q4 2021

Cutix Plc has projected that its revenue will double and profit will increase by 9% to N148 million.

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Cutix Plc, dividend

Cutix Plc has projected that in the fourth quarter of its financial year 2021, its revenue will double and profit will increase by 9% to N148 million.

These projections were made by the company in a recent earnings forecast issued by the Management, and signed by the Company’s CEO and CFO.

READ: Vitafoam shares gain 9.6%, as company reports N4.11 billion as profit in 2020

Key highlights of the earnings forecast for Q4 ended April 30, 2021

  • Revenue to increase to N1.66billion, 100% Q-o-Q.
  • Cost of Sales to increase to N1.16 billion, 70% Q-o-Q.
  • Distribution, Admin & Other expenses to increase to N232.89 million, 14%% Q-o-Q.
  • Other Income to remain unchanged at N2.50 million,
  • Finance Charges to increase slightly to N47.38 million, 3% Q-o-Q.
  • Operating income to increase to N227.83 million, 14% Q-o-Q.
  • Taxation is projected at N79.74 million.
  • While Profit attributable shareholders is projected at N148.10 million.

READ: Royal Exchange Plc forecasts N500.83 million PAT in Q1 2021

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Bottom line

The earnings forecast was made on the ground that the Nigerian economy will continue improve, as the country recovers from the impact of COVID-19. In this regard, revenue in the fourth quarter of 2021 will be slightly higher than the revenue projected in the third quarter of 2021.

READ: Okomu Oil Plc records 27.01% decline in 2020 Q3 revenues

However, the increase in the cost of sales driven by the input cost will pressure profitability to the tune of N148.10 million, which is 9% higher than the profit after tax made in the corresponding quarter of 2020.

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Company Results

Vitafoam shares gain 9.6%, as company reports N4.11 billion as profit in 2020

Vitafoam Nigeria Plc profit revealed 72.10% increase when compared with the N2.39 billion reported in the corresponding period of 2019.

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Vitafoam Nigeria Plc, Vitafoam returns to a 5-year high

Vitafoam Nigeria Plc has reported in its audited financial statement for 2020 that it made a profit of N4.11billion for the year ended 30 September 2020.

This represents a 72.10% increase in profit when compared with the N2.39billion profit reported in the corresponding period of 2019.

READ: Vitafoam returns to a 5-year high

Key highlights

  • Revenue increased to N23.44 billion in 2020, 5.21% Y-O-Y.
  • Cost of Sales decreased to N12.43 billion in 2020, 8.06% Y-O-Y.
  • Gross Profit increased to N11.01 billion in 2020, 25.68% Y-O-Y.
  • Other income increased to N638.97 million in 2020, 63.91% Y-O-Y.
  • Distribution costs increased to N1.05 billion in 2020, 8.13% Y-O-Y.
  • Administrative expenses increased to N4.13 billion in 2020, 10.57% Y-O-Y.
  • Operating profit increased to N6.47 billion in 2020, 45.58% Y-O-Y.
  • Finance income increased to N106.51 million in 2020, 5.39% Y-O-Y.
  • Finance Costs decreased to N930.17 million in 2020, 11.39% Y-O-Y.
  • Profit from continuing operations increased to N3.92 billion in 2020, 58.88% Y-O-Y.
  • Profit from discontinued operations increased to N191.63 million in 2020, 345.68% Y-O-Y.
  • Profit for the year increased to N4.11 billion in 2020, 72.10% Y-O-Y.

READ: Vitafoam’s 2020 oncourse to make light–work of 2019

READ: Sterling Bank Plc forecasts N2.09 billion PAT in Q1 2021

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What you should know

  • Shares of the company have gained 9.6% within the first one hour of trading, largely at the backdrop of news of the company’s impressive performance as the current valuation of the company in the light of its results suggests that the shares of the Company are undervalued at the current price.
  • Checks by Nairametrics as of 11:10 am today confirmed that the company is on a full bid, as 4,930,245 bids from 23 investors have been placed at the highest price for the day, without a single offer at a price lower than N8.55.

READ: Ecobank Transnational Inc. records 11% increase in interest income for Q3 2020

Bottom line

The profitability of the company was beefed up in 2020 on the back of the decrease in the cost of raw materials coupled with the increase in sales from the core segment of the company which led to the 5.21% increase in revenue in 2020.

READ: Bitcoin miners are super-rich, earn $1,000,000 per hour

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However, it is important to note that the impressive performance of the Vitafoam Group was also strengthened by the increase in other profit owing to improvement in sales, this helped the company to also grow its revenue from services provided to customers’ after-sales.

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Company Results

Neimeth posts profit of N212.48 million for year-ended September 2020

Neimeth profit declined by 3.48%, as profitability was pressured by rising costs and expenses in 2020.

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Neimeth Pharmaceuticals

Neimeth Pharmaceuticals Plc has reported in its audited financial statement for 2020 that it made a profit of N212.48 million for the year ended 30th September 2020.

This represents a 3.48% decline in profit when compared with the N220.15 million PAT reported in the corresponding period of 2019.

READ: PZ incurs N1 billion in exchange rate loss 

Key highlights

  • Revenue increased to N2.84 billion in 2020, 19.73% Y-O-Y.
  • Cost of Sales increased to N1.33 billion in 2020, 13.11% Y-O-Y.
  • Gross Profit increased to N1.51 billion in 2020, 26.23% Y-O-Y.
  • Other income increased to N29.29 million in 2020, 1049.33% Y-O-Y.
  • Marketing and distribution expenses increased to N505.11 million in 2020, 33.90% Y-O-Y.
  • Administrative expenses increased to N452.28 million in 2020, 20.54% Y-O-Y.
  • Exchange loss increased to N188.05 million in 2020, 479.25% Y-O-Y.
  • Operating profit decreased to N393.26 million in 2020, -4.87% Y-O-Y.
  • Finance costs decreased to N95.87 million in 2020, -12.00% Y-O-Y.
  • Profit after tax decreased to N212.48 in 2020, -3.48% Y-O-Y.

READ: Bitcoin miners are super-rich, earn $1,000,000 per hour

Bottom line

The report revealed that despite the impressive performance of the core operating segment of the company, and the increase in the revenue generated from the Animal Health segment, the profit of Neimeth Pharmaceuticals was pressured by rising costs in 2020 and this led to 3.48% decline in profit year-on-year.

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

Neimeth Pharmaceuticals suffered from substantial cost and expenses increase in 2020, as the increase in production cost, marketing and distribution expenses (driven by increased payment to employees in this department), administrative expenses (driven by expenses paid for conference and meetings, bank charges and commission, communication and subscription, energy cost, insurance and medical expenses) and increase in foreign exchange loss driven by naira devaluation, pressured profitability in 2020.

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