Fidson Healthcare Plc is on a road to rebound following the release of its 2019 financials. Despite having a dip in its revenue, its income for the year experienced a rebound from the loss recorded in the same period in 2018.
The unaudited full-year report of Fidson as of December 31, 2019, showed that the company’s revenue suffered a decline, as it realised a total of N14 billion, representing a 13 percent decline from the N16 billion recorded in the corresponding period of the previous year.
The company generated its revenue from three areas which were: over the counter (OTC), ethical, and consumer products, all of which recorded lower proceeds when compared with the previous year. Earnings from the sales of ethical products generated the most for the company as it contributed N7.8 billion to its revenue while the OTC products contributed N6.1 billion. However, the consumer products contributed the least with N2 million.
The company’s gross profit also dropped by 17 percent to N5.8 billion, from N6.3 billion in 2018. However, its operating profit increased marginally to N2.11 billion from N2 billion realised the previous year. Its total comprehensive income improved and grew significantly to N312 million from a loss of N97 million in the previous year.
The company experienced rebound amidst declining sales, as well as several challenges experienced by their counterparts in the industry and other sub-sectors of the economy. These challenges range from a high rate of drug smuggling, lack of adequate power supply, logistics worsened by congestion and bad roads at the nation’s busiest port, Apapa and Tin Can.
In addition to this, infiltration of fake drugs into the market as well as the use of non-orthodox medication has continued to thrive owing to poor and misplaced regulation, as well as harsh economic environment which has weakened consumer purchasing power.
However, analysts believe that going forward, the firm will experience more financial growth considering its partnership with other industry players which will spur business expansion in the company’s activities.
In the second quarter of 2019, GlaxoSmithKline (GSK), one of the top players in Nigeria’s manufacturing industry, announced that it would shut down its production facility in Agbara by the third quarter of 2021, and picked Fidson Healthcare Plc as its preferred local contract manufacturing partner as part of the changes in its consumer healthcare supply chain operating model. It will transition the manufacturing of its wellness and respiratory products from the third quarter of 2021.
In July 2019, Fidson announced its alliance with Ohara Pharmaceutical, a leading Japanese healthcare company as the firm acquired a 21.75 percent stake in Fidson with N700 million to support Fidson in fulfilling its commitment to provide the Nigerian market with latest healthcare products and services.
The drug maker recently introduced Chlorpheniramine Maleate Syrup for allergy and common cold.
Nigeria’s drug makers have invested N300 to N500 billion locally in new plants, vehicles, buildings and personnel.
They share 35 percent of the African drug market and over 70 percent of the West African market, according to PMG-MAN. Fidson is an ultra-modern manufacturing plant in Ogun State since 2016.
The pharmaceutical industry is challenged by poor competitiveness resulting from tough doing business environment in Nigeria.
Swiss Pharma sold its assets to Biogaran-Servier in March 2017 two years after obtaining the World Health Organisation (WHO)’s prequalification that should have enabled it to win international bids. Evans Medical Plc was taken over by the defunct Skye Bank.
In 2014, companies like Emzor, GSK, and a number of others earned $7.708 million from export of medicines to the African market, according to the International Trade Centre (ITC). Four years later, however, the companies made only $708,000. Naira has weakened from N199/$ in 2014 to N360/$ in 2018 (80.9 percent), but export earnings fell by a whopping 989 percent. Fidson is among the few that are bracing the odds in the industry.
Gbemi Faminu
