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.”