MeCure revenue up 45% on increased demand for medication

MeCure Industries Plc, a pharmaceutical company in Nigeria, has reported a 45 percent increase in revenue, rising to N46.03 billion in 2024 from N31.76 billion in 2023, due to rising demand and increased sales.

This surge can be attributed to N25.2 billion in sales of acute medications, N10.2 billion in sales of OTC (over-the-counter) medications, and N5.1 billion in sales of supplement medications.

BusinessDay findings from the firm’s latest financial result reveal that despite the revenue boost, profitability took a hit with its after-tax profit falling to N2.32 billion from N2.91 billion.

The key driver behind this contraction was a sharp increase in finance costs, which more than doubled from N2.39 billion to N4.98 billion. The company’s reliance on debt financing, amid rising interest rates, contributed to this elevated expense.

Additionally, administrative and marketing expenses saw significant increases, amounting to N4.3 billion and N2.4 billion, respectively.

In response to inflationary pressures, the company faced a notable increase in the cost of sales, which rose by 45 percent to N31.24 billion. This rise in expenses reflects the escalating costs of raw materials and logistics in Nigeria’s challenging economic environment.

Operating profit rose by 36.19 percent to N8.281 billion, supported by revenue growth.

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

However, operating expenses, particularly marketing expenses (+110.07 percent) and administrative costs (+39.72 percent), weighed on profitability.

As a result, the operating profit margin contracted to 17.99 percent, down from 19 percent in 2023.

The company’s tax obligations rose by 25 percent, with income tax for the year amounting to N974.13 million, this increase further eroded net profitability, leading to a 20 percent decline in profit after tax.

The company continued to invest in expansion, as evidenced by the 42 percent increase in total assets, which reached N54.84 billion. This growth was primarily driven by investments in property, plant, and equipment, reflecting the company’s commitment to scaling production capacity.

However, the company’s liabilities also surged, with total borrowings increasing from N19.39 billion in 2023 to N31.06 billion in 2024, raising the gearing ratio from 60 percent to 69 percent.

Cash flow from operating activities remained positive at N4.13 billion, although lower than the previous year’s N4.98 billion. The decline was driven by higher tax payments and increased working capital requirements.

Meanwhile, the company’s aggressive investment strategy resulted in negative cash flows from investing activities amounting to N14.6 billion from a negative N15 billion.

MeCure’s cash and cash equivalents stood at N398 million, a 43.7 percent decline from N707 million.

In its corporate disclosure statement, Mecure announced a final dividend of N0.15 per share for the financial year ended December 31, 2024, subject to withholding tax and shareholder approval.

According to the announcement, shareholders whose names appear in the Register of Members by the close of business on Friday, April 18, 2025, will be eligible to receive the dividend. However, no bonus shares were proposed for the year.

“The Register of Shareholders will be closed from Monday, April 21, 2025, to Friday, April 25, 2025, while the payment date will be communicated once the company schedules its Annual General Meeting (AGM),” it said.