Analysis of H1 2020 results of the NSE listed Pharmaceutical companies indicates that only Pharma-Deko recorded decreased revenues in H1 2020 – a 49.4% decrease.
Compared with the same period in 2019, Fidson Healthcare Plc recorded an 11.3% increase in revenues, GSK Consumer Nigeria Plc recorded a 4.7% increase in revenues, and May & Baker Nigeria Plc recorded a 0.4% increase in revenues.
The above results confirm that listed pharmaceutical companies are taking advantage of disruptions caused by the COVID-19 pandemic on businesses to boost revenues. Some of these companies also grew their pre-tax profits. The pre-tax profits of Fidson Healthcare Plc grew by 81.4% and May & Baker Nigeria Plc grew by 50.9%.
- Pharma-Deko Plc manufactures, packages, and markets a range of pharmaceutical and consumer products in Nigeria. It was established in 1962 and formerly known as Parke-Davis & Company. The company changed its name to Pharma-Deko Limited in 1990.
- Pharma-Deko Plc is divided broadly into three (3) divisions: Pharmaceutical business group, Consumer business group, and Contract manufacturing group. These divisions also represent its three revenue-generating segments.
The company’s pharma brands are divided into OTC brands and Ethical products. The consumer brands include the non-sugar based carbonated soft drink (CSD) market. The company introduced the first locally canned drinks in Nigeria and asserted that it enjoys more than 70% of the canned drinks market sub-sector. The company is also involved in contract manufacturing and packaging of both pharmaceutical and fast-moving consumer goods.
An in-depth analysis of the latest results of the company reveals that revenues plummeted by 49.4%, while other listed pharmaceutical companies took advantage of the COVID-19 pandemic to record increased H1 2020 revenues.
Revenues from the pharmaceutical revenue-generating segment of the company dipped by 18.2% from N26.3 million in the same period last year to N21.6 million in H1 2020.
While revenues from the consumer revenue-generating segment dipped by 52.7% from N247.6 million in the same period last year to N117.1 million in H1 2020.
No revenue was recorded for the contract revenue-generating segment in the period under consideration.
Pharma-Deko Plc’s shares were listed on the floor of the NSE on April 18th, 1969. The shares currently trade at N1.5 per unit. The highest price for a unit of share in 52 weeks was N1.65 and the lowest N1.35. A total of 49,508 units was sold in the last seven days’ trades. Shares outstanding is 216.8 million units and its market capitalization as at close of business on Tuesday, 13th October 2020 was N325.2 million.
The N177.4 million post-tax loss recorded in H1 2020 is an indication that there was no distributable profit. Thus, the H1 2020 Earnings Per Share (EPS) of the company was a deficit -81.7 kobo.
Neimeth International Pharmaceuticals Plc operates in the same sub-sector as Pharma-Deko Plc. Its share price is N1.87. The highest price for a unit of share in 52 weeks was N2.57 and the lowest N0.37. A total of 9.8 million units were sold in the last seven days trades. Shares outstanding is 1.9 billion units and its market capitalization as at close of business Tuesday, 13th October 2020 was N3.6 billion.
What you should know
While the company hopes for the best, performances may not improve in the near future. Further analysis indicated that internal crises partly constitute the issues that translate into declined profitability.
According to the employees of the company, after 11 years of inadequacy, they took to the streets of Agbara Industrial Estate, Ogun state last year to protest the alleged gradual collapse of the company. The aggrieved employees cited mismanagement of the company’s resources as the reason behind their grievances. It appears the fortunes of the company have not changed since then.
Employees, led by their various plant unions – Food, Beverage and Tobacco Senior Staff Association (FOBTOB); and National Union of Food, Beverage, and Tobacco Employees (NUFBTE), called on the company’s board to act in order to save the company from collapsing.
What they are saying
The joint unions of the aggrieved employees noted that if the company collapses, it will be a result of mismanagement. They said, “Ours is a clear case of mismanagement; hence, we the members of staff, both Junior and Senior employees have refused to sit down, fold our hands, and do nothing, while we watch our company become history.”
MTN Nigeria posts N975.76 billion revenue for Q3 2020
MTN Nigeria has recorded total revenue of N975.76 billion for Q3 2020, moving up from N856.549 billion recorded in the corresponding period in 2019.
MTN Nigeria has recorded a 13.9% boost in its total revenue for Q3 2020, as it recorded total revenue of N975.76 billion this year, up from N856.549 billion recorded in the corresponding period last year.
This is according to its updated financials available on the Nigerian Stock Exchange Market.
- Operating profit also increased by 7.8% from N284.73 billion in Q3 2019 to N307.01 billion in Q3 2020.
- The growth in operating profit was largely impacted by the increase in finance costs as a result of increased borrowings (September 2019: N381 billion, September 2020: N509 billion), leading to a decline of 0.6% in profit before tax to N211.6 billion.
What you should know
The following are key metrics which impacted the Q3 2020 figures posted by the firm:
- Mobile subscribers increased by 3.9 million to 75million.
- Active data users increased by 1.7 million to 30.7 million.
- Service revenue increased by 13.9% to N973.8 billion.
- Earnings before interest, tax, depreciation, and amortization (EBITDA) grew by 9.1% to N497.9 billion.
- EBITDA margin declined by 2.3 percentage point (pp) to 51.0%, due to cost pressures arising mainly from increased investments in the firm’s network and the impact on costs of the depreciation to the CBN and NAFEX exchange rates.
- Profit before Tax (PBT) declined by 0.6% to N211.6 billion.
- Earnings Per Share (EPS) declined by 3.3% to N7.1 kobo
What they are saying
Commenting on the rationale behind the revenue growth in the latest financials posted by the firm, the CEO of MTN Nigeria, Ferdi Moolman, said, “Following a decline in voice traffic and an acceleration in data during lockdowns in Q2, we have seen a normalization of traffic as restrictions have been removed, with a recovery voice traffic and continued growth in data. This has supported a 13.9% growth in service revenue, with an acceleration of growth to 16.5% in Q3 specifically.”
Lafarge Africa Plc: Increase in cement sales boosts revenues
Lafarge got a major boost from an increase in its cement revenue-generating unit, but revenues from aggregate and concrete decreased.
Lafarge Africa Plc reported revenues of N59.34 billion in Q3 2020 compared to N45.17 billion in the corresponding period of 2019.
Key highlights – 2020 Q3
- Revenues increased by 31.4% from N45.17 billion to N59.34 billion YoY.
- Revenues from cement increased to N58.17 billion, +32.2% YoY.
- Revenues from aggregate and concrete decreased to N1.17 billion, –1.31% YoY.
- Gross profit increased to N13.8 billion, +14.15% YoY.
- Pre-tax profits increased to N5.53 billion +18.10% YoY.
Lafarge Africa Plc got a major boost from an increase in its cement revenue-generating unit, but revenues from aggregate and concrete decreased.
Though companies have generally recorded decreased revenues in the last three quarters mostly due to COVID-19, Lafarge Africa Plc was able to increase its total revenues, as well as pre-tax profits. The results confirm Lafarge Africa Plc’s COVID-19 action plan – Health, Cost, and Cash is yielding a positive impact
Flour Mills reports N9.9 billion profit in HY 2020/21
The increase in profit before tax was largely driven by the agro-allied segment.
Flour Mills Nigeria, announced its unaudited 2020/21 half-year financial results today, showing continued growth with a Profit after Tax of N9.9 billion for the six months ended 30th September 2020.
What you should know
- Flour Mills’ revenue was N355.1 billion, compared to N270,8 billion in H1 2019/20.
- The Group’s profit before tax was N14.6 billion, compared to N8.6 billion in H1 2019/20. The increase in profit before tax was largely driven by the agro-allied segment, which generated a profit of N6.3 billion compared to a loss the previous year.
- The agro-allied segment saw very strong improvement in the edible oils and fats, protein, and fertilizer businesses, following the investments over the last few years.
- The Group’s profit after tax was N9.9 billion, compared to N5.9 billion in H1 2019/20.
- FMN continued to show sustained growth in key segments driven by the closure of the Nigerian border since August 2019.
Despite prevailing economic headwinds, the Group continued to show sustained growth in key segments driven by the border closure since August 2019.
As the FMN key segment continues to capitalize on this development due to the strategic placement of the Group’s business in the industry.
This development led to a strong performance in edible oils and proteins supported by agro-inputs (fertilizer) and agro-distribution and aggregation structures.
In line with FMN’s growth strategy, the edible oils and fats value chain saw a significant year-on-year increase of 32% in volume, turning in a profit when compared to the loss in H1 2019/20.
However, volumes for the protein value chain also increased by 18% year-on-year, while the starch value chain was up by 31% year-on-year.
What they are saying
Commenting on the result, Paul Gbededo, the Group Managing Director /CEO, stated; “With this result, our business has once again shown resilience, by following the path of sustainable growth despite the prevailing challenges in both the local and global economy.”
He further assured that “in line with our vision to continue to grow value for our investors, Management will for the remaining part of the financial year continue to concentrate on improving operational effectiveness through accelerated strategies for Group-wide cost optimization, which will ensure sustainability in the current market climate, while we continue to invest in growing the business further.”