May & Baker’s foreign exchange gains hit N458m, highest in a decade

May & Baker Nigeria reported a foreign exchange gain of N458.9 million in 2022, the highest in a decade despite foreign exchange scarcity during the period which boost its other operating income.

The firm’s N458.9 million foreign exchange gain accounted for 27 percent of the total other operating income earned in 2022, which was a recovery from an exchange loss of N141 million in 2021.

May & Baker’s 2022 foreign exchange gain shows its ability to leverage on export goods and earn in foreign currency which further has a positive impact on the firm’s profitability.

Other operating income stood at N1.69 billion from another operating loss of N98.99 million driven mainly by profit on disposal of PPE which amounted to N1.2 billion and exchange gain of N458.9 million.

Revenue grew 20 percent to N14.3 billion in 2022 from N11.9 billion in 2021 which is driven by the pharmaceuticals segment (99.8%) and beverage segment (0.2%).

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May & Baker’s pharmaceuticals segment revenue grew 20 percent to N14.3 billion in 2022 from N11.9 billion in 2021 while beverage revenue dropped 20.9 percent to N26.5 million from N33.5 million.

Profit after tax rose to N1.7 billion in 2022, 62 percent increase from N1.05 billion in 2021 thereby leading to a profit margin of 11.9 percent, 310 basis points increase from 8.8 percent in the period reviewed.

Cash and cash equivalents rose to N3 billion, an 11 percent increase from N2.7 billion driven mainly by positive cash flows from May & Baker’s net cash from operating activities and net cash used in investing activities during the period.

Movement in the firm’s cash and cash equivalents revealed that net cash from operating activities amounted to a positive N1.9 billion in 2022 from a negative N2.3 billion in 2021, on the back of cash received from customers which were N14.8 billion.

The firm’s net cash used in investing activities was at a positive of N198.2 million from a negative of N486.5 million driven by proceeds from the sale of fixed assets.

Net cash used in financing activities stood at a negative of N1.8 billion from a positive of N1.6 billion, the negative cash flow can be attributable to the firm’s additions to/repayment of import facility, dividends paid, loans repaid, and finance cost during the period.

The firm’s operating expenses(OPEX) rose to N3.3 billion in 2022, 10 percent increase from N3 billion in 2021 which led to an OPEX margin of 23 percent in 2022, 200 basis points decline from 25 percent in 2021.

Furthermore, riding on the hawkish stance of the central bank of Nigeria, interest on bank deposits caused finance income to surge to N256.8 million in 2022, up 332 percent from N59.4 million in 2021.

Earnings per share stood at N100.32 per share in 2022 from N60.84 per share in 2021.


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