MeCure Industries Plc has released its unaudited financial results for the second quarter ended June 30, 2025, reporting a pre-tax profit of N3.093 billion, representing an impressive 634% year-on-year (YoY) growth compared to Q2 2024.
This strong second-quarter performance pushed H1 2025 pre-tax profit to N3.903 billion, marking a 192% YoY increase and already 18% higher than the company’s full-year 2024 pre-tax profit.
A closer look at the financials shows that the impressive bottom-line growth in Q2 was largely driven by a sharp increase in revenue:
- Q2 2025 revenue surged to N23.97 billion, nearly doubling Q1 figures, and pushing H1 revenue to N37 billion — almost matching MeCure’s total revenue for the whole of 2024.
- This revenue expansion was largely driven by robust demand for acute care and OTC (over-the-counter) products, which continued to account for the bulk of the company’s revenue.
Another contributing factor to the strong profit was the slower growth in the cost of sales relative to revenue:
- While revenue rose 165% YoY, cost of sales increased by 159% to N15.55 billion.
- This helped gross profit climb to N8.32 billion, translating to a gross margin of 35%.
Despite higher overheads in Q2 2025, the company showed better cost discipline:
- Overheads consumed just 38% of gross profit in Q2 2025, compared to 61% in Q2 2024.
- This resulted in a 329% YoY increase in operating profit to N5.17 billion, lifting the operating margin to 21% — a significant improvement from the prior year.
Finance costs rise, but stronger earnings improve interest coverage
- Finance costs surged by 166% to N2.07 billion, driven by increased borrowings.
- However, the improved operating performance led to a better interest coverage ratio of 2.49x, up from 1.59x in Q1 2024, meaning the company is more capable of meeting its debt obligations from operating earnings.
Balance sheet:
- Total assets rose by 23% in six months to N67.5 billion, reflecting expansion efforts.
- However, this growth was largely debt-funded, with total borrowings up to N46.1 billion, now accounting for 68% of the balance sheet size.
- Consequently, the gearing ratio (debt-to-equity) has increased to 73%, raising flags about leverage levels despite rising profitability.
- Shareholders’ funds stood at N16.09 billion, representing just 24% of the balance sheet.
Key highlights (Q2 2025 vs Q2 2024)
- Revenue: N23.970 billion +164.89% YoY
- Cost of sales: N15.549 billion +159.22% YoY
- Gross profit: N8.322 billion +176.29% YoY
- Operating profit: N5.165 billion, +329.70% YoY
- Finance cost: N2.072 billion +165.47% YoY
- Profit after tax: N2.164 billion +631.18% YoY
- Cash and cash equivalents: N3.168 million +809.65% YoY
- Total assets: N67.504 billion +23.10% YoY
- Total borrowing: N46.096 billion +27.45% YoY
- Shareholders’ funds: N16.092 billion +15.28% YoY
Market performance
As of the close of trading on August 6, 2025, MeCure’s stock was priced at N15.85, reflecting a 14% year-to-date gain.
More insight
MeCure Industries’ Q2 2025 performance marks a significant turnaround — driven by booming sales in acute and OTC segments, improved cost efficiency, and stronger gross and operating margins.
The company’s aggressive expansion, largely funded by debt, has heightened its leverage risk.
However, it is generating sufficient operating profit to service this debt, as reflected in the improved interest coverage ratio of 2.49x.
