Fidson profit surges 1077.51 percent on aggressive expansion drive

Fidson Healthcare Plc’s aggressive expansion for increased market share, in addition to the launch of new products, has paid off as half year profit surged 1077.51 percent to N466.06 million.

Analysts say that with strong margins, solid asset base, and improved liquidity, the Nigerian Drug maker is poised to add value to shareholders’ wealth.

Sales also followed the same upward trajectory as it spiked by 155.01 percent to N6.66 billion, thanks to 189.65 percent upsurge in revenue from over-the- counter drugs (OTC) to N4.20 billion. OTC comprised 63.21 percent of total sales figure within the period.

Fidson has been able to translate each naira collected in revenue from sales to profit as net margin increased to 7 percent as against 1.59 percent of the corresponding period in 2016.

Return on equity (ROE) increased to 6.67 percent in the period under review from 1 percent the previous year. This means that the drug maker has utilized the resources of shareholders in generating higher profit.

An industry expert who spoke to BusinessDay said tremendous improvement in revenue could be as a result of the introduction of a flagship product, ASPYMIN, which he said is gaining considerable acceptability in the market.

Analysts say the completion of a N9 billion ultra-modern manufacturing plant in Sango Ota, Ogun State, helped Fidson double capacity and improve production efficiency.

The new manufacturing facility is one of the five facilities shortlisted for WHO’s certification in Nigeria.

The plant, which boasts of an unprecedented capacity for drug production, is equipped with six production lines for tablets, Capsules, Liquids, Cream and Ointments, Dry Powder and Intravenous fluids, to meet the needs of the Nigerian and West African markets.

Fidson’s aggressive expansion plan is gaining momentum as the Federal Government and the Bank of Industry (BOI) has indicated intentions to further raise the production capacity of the drug maker.

Drug makers in the economy of Africa’s largest oil producer have been grappling with paucity of foreign exchange that hindered them from importing key products and essential raw materials for manufacturing.

The scarcity became intense to the extent that pharmaceutical stores ran out of drugs as the price of drugs went up astronomically.

However, the new foreign exchange window introduced by the central bank since early April has stabilized the foreign exchange markets as manufacturers’ pains are gradually easing.

This means drug manufacturers will have access to the desired dollars they require in order to import major raw materials that make up 90 percent of manufacturing process.

As a result of the impact of the devaluation of the Naira, dearth of dollars to import raw materials, and costs incurred to build new plants, Fidson’s cost of sales spiked by 159 percent to N3.24 billion; Operating expenses surged by 118.09 percent to N2.13 billion.

Fidson’s shares rose 4.76 percent to N3.08 when trading closed on The Nigerian Stock Exchange on Tuesday, valuing the company N4.62 billion.