MeCure after-tax profit drops by 21% on rising cost

MeCure Industries Plc, a pharmaceutical company in Nigeria, has reported a 21.2 percent decline in its after-tax profit for the nine months of 2024.

BusinessDay findings from the firm’s latest financial statement show that high production cost, operating and finance expenses drove down its profit to N1.55 billion in nine months of 2024, from N1.98 billion in 9M’23.

Production cost rose to N20.9 billion from N14.1 billion, despite the federal government initiative to reduce importation of raw materials and encourage local production.

Operating expenses or OPEX rose to N5.02 billion from N3.13 billion. A breakdown of the company’s OPEX consists of marking expenses, which rose to N1.93 billion from N882 million, and administrative expenses which rose to N3.08 billion from N2.25 billion during the reviewed periods.

Similarly, MeCure’s finance cost surged by 64.7 percent to N2.8 billion from N1.7 billion, thereby denting its profitability despite steady revenue streams.

The company’s financial statement disclosed that its revenue from sales of finished products rose to N30.2 billion from N21.5 billion, with Nigeria accounting for the total sales.

However, the company’s other income income rose by 5.97 percent to N19.5 million from N18.4 million.

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MeCure in its financial statement disclosed that the rise in its other income was on the back of an increase in sales of by-products.

Although the company’s gross profit rose to N10 billion from N7.4 billion, its operating profit increased to N5.02 billion from N4.36 billion due to high operating expenses incurred in the year.

Total assets rose to N51.3 billion, with total liabilities rising to N38.1 billion, thereby bringing its shareholder funds to N13.1 biillion.

Further analysis reveals that MeCure’s cash and cash equivalent rose to N866 million from N166 million during the period reviewed.

Movement of cash and cash equivalent reveal that net cash flows from operating activities surged to N5.1 billion from N2.7 billion.

Net cash generated from investing activities reported a negative N10.9 billion from N7.6 billion. Net cash used in financing activities stood at N5.9 billion from N5 billion.

Last month, BusinessDy reported that Zrosk Investment Management Limited successfully acquired a 10 percent equity stake in MeCure Industries Plc.

“The partnership with Zrosk InvestmentnManagement Limited, a prominent player in the investment management space, brings not only financial backing but also a shared vision to expand and enhance MeCure’s footprint in the pharmaceutical and healthcare sectors.”

“This aims to improve operational efficiencies and provide greater access to resources necessary for advancing MeCure Industries’ market position,” the report disclosed.