18% rise in year-end net profit

Durrant Pate/Contributor

Pharmacy company Fontana Limited has broken the $6 billion mark for the year ended June 30, 2022.

Revenues went up 23 per cent increase to total J$6.34 billion compared to J$5.15 billion for 2021. Revenues for the fourth quarter inched up 0.48 per cent to J$1.67 billion, up from J$1.66 billion in 2021.

The management reports that it continues “to experience strong revenue growth in key departments due to increased demand and significant inventory levels… . We continue to experience strong revenue growth in key departments due to increased demand and significant inventory levels”.

Cost of Sales increased by 27 per cent to close at J$4.08 billion, up from J$3.20 billion last year, while for the fourth quarter there was a five per cent uptick to J$1.07 billion (2021: J$1.02 billion). As such, gross profit for the year amounted to J$2.26 billion, a 16 per cent uptick when compared to J$1.95 billion recorded last year.

Marginal rise in expenses

However, gross profit for the fourth quarter declined seven per cent from J$643.64 million booked in 2021 to J$597.99 million in 2022. Fontana’s administrative expenses rose by 15 per cent to J$1.44 billion versus J$1.24 billion in 2021, while selling and promotion expenditure closed the year at J$63.60 million (2021: J$55.67 million).

As such, operating profit experienced a 17 per cent increase to J$760.61 million relative to J$648.43 million booked last year. Other income for the year amounted to J$73.02 million (2021: J$60.18 million).

Finance cost year to date totalled J$217.07 million, an increase of 30 per cent when compared to the J$167.23 million recorded last year while for the quarter finance cost amounted to J$25.20 million (2021: J$103.61 million),  a 76 per cent decline.

This resulted in profit before taxation totalling J$616.56 million compared to J$541.38 million recorded last year, a 14 per cent year over year increase. Profit before tax for the last quarter moved from J$306.75 million in 2021 to J$202.01 million in 2022, a 34 per cent decline year-over-year.

Profitability holding firm

Taxation charge for the year amounted to J$10.36 million (2021: J$29.05 million) and as such net profit for the year increased 18 per cent to J$606.20 million compared to J$512.33 million booked for 2021. Net profit for the fourth quarter amounted to J$191.66 million compared to J$277.69 million in 2021.

As at June 30, 2022, total assets amounted to J$4.55 billion, up J$1.08 billion from J$3.47 billion as at the previous year. The increase in total assets was as a result of the increase in ‘Cash and Cash Equivalents’ and ‘Right of use Asset’ which closed the period with J$1.49 billion (2021: J$859.23 million) and J$949.63 million (2021: J$747.67 million), respectively.

The management attributes this to cash flows improving by 74 per cent, and cash balances continue to grow as revenues increased across all stores. This was bolstered by the proceeds from our December 2021 bond issue for CAPEX and expansion.

Shareholder equity grew by J$356 million, an increase of 19.7 per cent over last year, enabling Fontana to make two dividend payments totaling J$250 million during the year. Shareholders’ Equity of J$2.16 billion was reported (2021: J$1.81 billion) which resulted in a book value per share of J$3.57 (2021: J$3.52).