Flat half-year for the Montego Bay based pharmaceutical company
Durrant Pate/ Contributor
Montego Bay based pharmaceutical company, Indies Pharma delivered a flat half-year performance for April 2023, as revenues went up 5 per cent while profit from operations declined by 15 per cent.
For the six-month period, Indies Pharma recorded gross revenues of J$487 million, up from J$463 million in the prior comparable period, representing a 5 per cent or J$24.3 million increase. Cost of Goods Sold came in at J$20.7 million or 16 per cent higher than prior year and was mainly responsible for this relatively flat showing.
Marketing samples given out in the trade have been identified as a major contributor (approximately J$12 million) to this increase. The return on investment on this spend is expected to be realized over the course of the financial year.
Moderate increase in expenses
Administrative expenses climbed by 14 per cent or J$26 million year over year. This was largely driven by increases in drug permit costs, wages and the usual yearly royalty expense and administration. This resulted in the profit from operations declining by J$22.2 million or 14 per cent compared to 2022.
These were largely responsible for net profits for the half-year being J$26.4 million or 23 per cent lower than the corresponding period of 2022. Total assets at the end of the six-month period stood at J$2.245 billion, marginally down by 0.4 per cent or J$9.5 million from J$2.255 billion in the comparative period last year.
Shareholders’ equity increased by 2.2 per cent or J$23.2 million this year to J$1.1billion compared to J$1.07 billion in 2022 while total liabilities went down by 3 per cent from J$1.18 billion to J$1.15 billion. Earnings per share (EPS) for the six-month period 2023 fell by 22 per cent to J$0.07/share, down from $0.09/share when compared to the corresponding period last year.
April quarter performance
For the second quarter ended April 2023 revenues declined by J$19.1 million (9 per cent) compared to the corresponding period in 2022. This decline is attributed to the late arrival of inventory in the month of April, precluding the timely billing of sales for this quarter impacting the revenues.
However, this is expected to be realized in the subsequent month and quarter. In addition to these factors, increased market sampling costs led to a sudden surge in demand for the key product line, leading to early out-of-stock situation of the “cash cow” products and therefore the delays in the replenishment lead times were among the factors cited for the poor quarterly performance.
According to the management, “This is a new learning opportunity the company has encountered for the first time. This has led the company to re-engineer new strategies to deal with this unprecedented interim shortfall”