The combined profit of Nigerian listed pharmaceutical firms rose to the highest level in six years, in the first nine months period of the year, after increasing demand for drugs amid the COVID-19 pandemic, helped lift sales.
Businessday analysed the financials of six drug makers listed on the Nigerian Stock Exchange (NSE), showing a whopping 82 percent uptick in profit to N2.17 billion in the nine months of 2020 from N1.19 billion the same period in 2019.
The surveyed drugmakers include Fidson Healthcare plc, May & Baker Nigeria plc, Glaxosmithkline Consumer Nigeria plc, Morison Industries plc, Pharma-deko plc, and Neimeth International Pharmaceuticals Plc.
Drugmakers in Nigeria have in the past struggled to stay afloat as they battled with a challenging macroeconomic environment, scarcity of foreign exchange to import raw materials, as well as the negative effects of drug smuggling.
In terms of sales and turnover, the year 2020 has been a great year for the drugmakers given the growing demand for vaccines, pain relievers, antibiotics, and other pharmaceutical products in light of the COVID-19 pandemic.
The pandemic has largely boosted sales for most of these drugmakers as Nigerians are buying more immune boosters and other drugs thought to protect against the virus.
The combined revenue of the drugmakers amounted to N39.4 billion in the first nine months of 2020, surpassing the previously recorded N34.8 billion in the same period of 2019.
The spike in sales of the drugmakers put their 9-months turnover in a better shape than the 34 percent decline that was seen during the 2016 recession when combined revenue dropped to N24 billion from N36.8 billion for the same period in 2015.
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The Central Bank of Nigeria (CBN) had earlier in the year made N100 billion worth of loans available to Nigerian drug manufacturers to help them in the procurement of raw materials and equipment to support local drug production.
At the time, there were shortages in drug import from China and India with many other countries opting to export their drugs and medical supplies due to the pandemic induced disruption in global supply chains.
While noting that the list might not be limited, the CBN announced the beneficiaries of the loan as Emzor, Fidson, Swiss Pharma, Neimeth, Orange Drugs, Dana Pharma, Sagar, Unique Pharma, May & Baker and GSK.
Fidson Healthcare plc
Interest-bearing loans and borrowings of Fidson healthcare plc grew 67.7 percent to N10.5 billion as at September 2020 from N6.3 billion as at December 2019.
Interest-bearing loans and borrowings climbed primarily as a result of the N2.5 billion loan the company accessed from the CBN N100 billion intervention funds in the second quarter of 2020.
The makers of the popular bodybuilding drug, astymin, were able to grow their 2020 nine months profit by 257.7 percent to N976 million from N272 million in the same period of 2019.
The company recorded its best profit in six years on the back of a 30 percent jump in its revenue to N13.6 billion from N10.5 billion in the nine months of 2019.
Revenue from the sales of drugs with written instruction from a Doctor, otherwise called ethical or prescription drugs grew 44.6 percent to N8.08 billion from N5.58 billion in the nine months of 2019.
While revenue from nonprescription drugs hit N5.6 billion, a 13.9 percent increase from the previous N4.9 billion.
The share price of Fidson Healthcare plc has improved from N3.80 as at the close of business two weeks ago to N5.40 on Wednesday, the 18th of November 2020.
May & Baker Nigeria plc
Having spent its 2019 N1.8 billion Rights Issue servicing debts and paying dividends, May & Baker obtained an N1 billion and N2.5 billion loan from the CBN intervention fund to help in the running of its affairs and to meet up with the pressing healthcare demands due to the pandemic.
In the nine months of 2020, May & Baker saw a 43.9 percent growth in profit to N681 million from the 2019 nine months profit of N473 million.
The profit boost was handed by a 9 percent increase in sales as well as a 24.7 percent jump in the company’s gross profit.
Revenue for the period grew to N6.4 billion from N5.9 billion, while gross profit jumped to N2.7 billion from N2.2 billion in the first nine months of 2019.
The company’s Earnings Per Share (EPS) improved 43.9 percent to N39.52 from N27.45 in 2019.
Since the release of the organisation’s financial report, the share price has peaked to N3.60 from N3.05 and is currently at N3.18 as at the close of business on Wednesday.
Glaxosmithkline (GSK) Consumer Nigeria plc
GSK, makers of popular digestive aid, Andrews liver salt, only saw a 1.7 percent rise in their 2020 nine months profit at N434 million from N427 million for the same period in 2019.
The nine months turnover of their products improved by 3 percent to N16.4 billion from the previous N15.9 billion recorded in 2019.
Since the release of the company’s financial statement, their share price has moved from N5.40 to close at N7.30 on Wednesday.
Morison Industries plc
In the last six years of business, Morison industries have been recording losses and the first nine months was not any different.
The medical equipment and consumables supplies company incurred a cut- loss of N46 million as against the N80 million loss seen in the nine months of 2019.
Their sales for the nine months of 2020 however, grew by 34.32 percent and moved revenue to N98.23 million from N73.13 million in the nine months of 2019.
The company’s share price initially remained flat at N0.54 following the release of the report but has now fallen to N0.49 as at the close of business on Wednesday.
Pharma-deko plc
Pharma-deko plc saw a cut-loss in the nine months of 2020 and a 1.16 percent increase in its revenue.
The loss incurred for the nine months was N161.3 million as against the N263.9 million loss for the same period in 2019.
Revenue on the other hand, grew slightly to N335.11 million from N331.27 million for the same period in 2019.
The company which analysts have referred to as “suffering from high-level industrial competition” was able to improve its revenue from pharmaceutical products by 226.61 percent due to the pandemic induced increase in healthcare demands.
Their share price has remained flat N1.50.
Neimeth International pharmaceuticals plc
Neimeth International operates a calendar that is different from that of the other drugmakers as its financial year ends in September.
To obtain Neimeth’s January to September 2020 financial report, Businessday subtracted the company’s first-quarter (October to December 2019) figures from the full year’s report.
The analysis revealed that between January to September of 2020, Neimeth saw a 21.1 percent decline in profit to N283.65 million from N359.31 million for the same period in 2019.
January to September revenue of the company grew by 12 percent at N2.4 billion from N2.14 billion for the same period in 2019.
