• Friday, July 19, 2024
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Nigeria’s largest drug makers profit surge to 7-year high on rising sales

Nigeria’s largest drug makers profit surge to 7-year high on rising sales

Following the rise in demand for prescription drugs amid the COVID-19 pandemic, Nigeria’s largest publicly listed pharmaceutical companies have posted their highest profit in seven years, an analysis by BusinessDay has revealed.

Fidson Healthcare, May & Baker and Neimeth plc recorded a combined profit of N3.45 billion in the first nine months of 2021, a 111 per cent increase compared to N1.36 billion recorded in the same period last year.

The drug makers have recorded slow profit growth over the years but the pandemic gave the drug makers the prop they needed as their profit surged on the back of increased drug sales.

The firms saw a 47 per cent increase in sales to N30 billion in 9M’21 compared to N20.9 billion in the same period of 2020. However, their sales cost soared 42 per cent to N15.7 billion compared to N11 billion in the periods under review.

Fidson’s 9M’ 21 profit increased by 138 percent to N2.3 billion from N976 million a year ago, as revenue surged 59 percent to N21.7 billion from N13.6 billion in 9M’20. The increase in sales helped the drugmaker to attain its highest profit in seven years.

Fidson’s sales cost jumped 57 percent to N10.8 billion in 9M ’21. However, the company was able to reduce borrowing cost by 3 percent to N927 million from N951 million in the first nine month of 2020.

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The drug maker’s performance has not gone unnoticed by investors, its shares are up 38.9 percent year till date.

May & Baker is another drug maker benefiting from the pandemic with a 29 percent increase in profit to N882 million in 9M’21 compared to N681 million a year ago. The firm’s drug sales grew 25 percent to N8 billion from N6.4 billion in the period under review.

May and Baker’s sales cost rose 16 percent to N4.3 billion in the first nine month of 2021 while its finance cost jumped 43 percent to N187 million in 9M’21 from N131 million a year ago.

The drug firm shares are up 16.8 percent year till date.

Neimeth Pharmaceuticals was able to turn a loss-making 9M’20 around this year with a profit of N251 million. Revenues jumped to N1 billion from N855 million in the first nine months of 2021. Its sales cost grew by 26 percent to N532 million compared to N421 million in the same period of 2020.

The pharmaceutical firm began the year with a share price of N2.23 but has since lost 26.9 percent year till date.

The drug makers have also been helped by the Central Bank of Nigeria’s (CBN) Pharmaceutical Intervention for COVID-19. The CBN extended credit facilities of up to N100 billion to support intervention efforts geared towards stimulating economic activities locally within the healthcare sector.

However, the pharmaceuticals are not without their challenges, they have had to struggle with scarcity of foreign exchange to import raw materials, drug smuggling and sales of adulterated drugs.