Drug manufacturing firm, Neimeth International, records a slight decline in profit in the year ending September, after ballooning cost and exchange loss depressed gains from higher revenue.
Profit of the drugmaker fell by 3.48 percent in the period to N212.48 million from N220.15 million the same period last year.
That’s despite the firm recording a higher turnover from all its operating segments including pharmaceuticals and animal segments.
Neimeth’s turnover was up by 19.73 percent to N2.84 billion from N2.37 billion.
Impressive revenue performances were recorded in all two business segments of the company, including pharmaceuticals and animals; and in its geographical segments as well.
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Revenue for the pharmaceutical segment of the company was up by 8.2 percent from N2.28 billion to N2.47 billion; while that of its animal segment increased by 309.5 percent to N369.01 million in year-end September from N90.11 million the same period last year.
In terms of geography, revenue from Nigeria and Ghana increased to N2.8 billion and N32.3 million in the year-end September 2020 from N2.35 billion and N16.55 million the same period last year respectively.
In the period, the company raked in N29.29 million as other income-driven gains on disposal of plant, property and equipment; sales of craps; insurance claim and lease rental income. That’s in contrast to the N2.55 million generated the same period last year.
Neimeth was also able to reduce by 13.6 percent its cost of interest expenses, interest on term loans, and interest on lease to N95.87 million from N108.94 million.
However, the impressive revenue performance, and other income as well as the gains from the reduction in finance cost, failed to transcend to higher profit for the firm as it was swallowed by the huge company’s cost and expenses.
In the period, cost of sales increased 13.11 percent to N1.33 billion in 2020; while marketing and distribution expenses increased 33.90 percent to N505.11 million.
Administrative expenses also increased by 20.54 percent to N452.28 million in 2020, while it lost N188.05 million to the naira devaluation this year compared to N32.47 million lost last year.
As such, the company’s profit before tax fell to N297.39 million from N304.44 million the same period last year.
As expected, investors reacted negatively to the company’s result with the share price falling by 3.04 percent to N2.23 at the end of the trading session Wednesday.
