Barely one week after Neimeth international pharmaceutical, a player in the Nigerian healthcare space, declared its nine months unaudited financial statements, rebounding to profit after a year-on-year loss, investors are gradually increasing their appetite for the ‘s stocks.
The firm’s share price was trading as low as N0.42k, the lowest this year, as at the end of trading session on Thursday, July 27, since then, the share price has continually headed north seeing a 31 percent (13 kobo)increase to N0.55k at the end of trading Wednesday.
Given that the firm has outstanding shares of 1.73 billion, the market cap also increased by 18.9 percent from 726 million to N863.253 million as at close of market Wednesday. Neimeth Pharmaceuticals led the gainers’ chart, advancing by 10.00 percent to close at 55Kobo
“What this signifies is that investors are beginning to react to the positive result by the firm, Dolapo Ashiru a stockbroker said, and hence they are adjusting their predictions based on the firms result”.
The drug maker saw a positive growth trajectory, reporting a profit after Tax of N31.7 million in the third quarter of 2018 after it recorded a loss of N63.4 million in the same period last year, according to figures obtained from its nine month unaudited financial statement.
Revenue generated by the company also saw a 45.2 percent increase from N314.9 million in 2017 to N457.4 million in 2018, with 99 percent of the revenue generated from pharmaceuticals, while 1 percent came from animal health. The finance cost also decreased by 45 percent to N18.9 million from as high as N35 million in 2017
Of this revenue figure, 98 percent came from its Nigeria arm, while 2 percent of the revenue generated was from the Ghana segment of the company.
Read also: Quality of values (2)
The firms Earnings per share (EPS) which is seen as a portion of the company’s profit allocated to each outstanding share of common stock currently stands at -0.24
Neimeth pharma starts a new financial year November of every year. Thus why other firms in the industry might be in their 2nd quarter or half year of operation, Neimeth books will be for a nine month or Q3 period.
The firm has a one year return of -30.38 percent, according to data compiled by Businessday, with its share price touching its peak at N0.96 around 18th January 2018, but currently trading at N0.55 yesterday.
Analysts said the brilliant result posted by the firm might increase investors’ appetite for the firm’s share thereby making the firm share price to rally.
On what could have triggered the company’s profit for the quarter, Johnson Chukwu, the MD of Cowry Asset Limited said the fall in the company’s finance cost as well as administrative expenses aside the growth in its turnover, brought about an improved performance for the company.
“The finance cost was as a result of either the company paying back its loan or the revision of their interest cost. This shows the company’s efficiency in cost. Hence, for the company to finance its debt, money was raised from the capital market but at a lower rate,”
“Furthermore, there is a high tendency for the recent profit of the company will have positive impact on their share capital.” Chukwu said in a phone response to BusinessDay.
BusinessDay insight into the company’s financials displayed a slight movement in the share capital and share premium by and a decrease and increase in N1, 000 which means that the money used by the company to finance its debt was not from the shareholders’ funds.
Likewise, there was an increase in the fixed asset of the company by 6.6 percent which also mean that the fixed assets of the company were not sold to finance its debts.
The short term liabilities (i.e the current liabilities) of the company indicated a 10.4 percent decline from its previous figure of N1.17 billion in its Q3 2017 to N1.04 billion in its corresponding period in 2018 which indicated that money was raised from the capital market by the company to finance its debt.
