Strong third quarter performance with net profit up 71%

Durrant Pate/Contributor                                        

Montego Bay-based pharmaceutical company, Indies Pharma continues to recover strongly from the pandemic with year-to-date net profit surging by 81 per cent.

For the nine-month period ended July 31, 2022, Indies Pharma Jamaica Limited saw its net profit jumped to J$199 million coming from J$104 million for the same nine-month period in 2021. The management is reporting that, “this encouraging increase was not by accident, but it is the true reflection of the company’s solid supply chain management planning that has yielded positive profit levels despite the interest payments incurred due to the Sagicor bond of J$805 million, raised in 2020 towards the company’s growth initiatives”.

Gross revenues ended the nine-month review period at J$728 million, 15 per cent higher than the        J$633 million recorded in 2021. Gross profit came out at J$517 million versus J$400 million reported in 2021, representing a 29 per cent increase or J$117 million when compared to the similar period in 2021.   

Customer loyalty driving performance          

The husband-and-wife-led management team of Dr Guna and Vishu Muppuri has credited growing customer loyalty for this growth in profitability.

They say “increased customer loyalty towards the product and service quality the company offers to its clients and the end users, are the contributing factors to the organic growth of the product line in addition to the stringent cost- effective management strategies”.

There was a slight increase in administrative expenses by seven per cent year on year principally due to higher level of fleet vehicles maintenance especially escalated gas prices and the increase in the salaries. Nonetheless profit from the operations grew by 55 per cent to J$237 million in 2022, up from J$153 million in the similar period 2021.

Total assets at the end of the nine-month period stood at J$2.2 billion up from J$1.7 billion in the comparative period 2021, reflecting an increase of 26 per cent. Shareholders’ equity has increased by 53 per cent this year to J$1.14 billion compared to J$746 million in the prior period 2021 and total liabilities increased by four per cent in 2022 to J$1.02 billion from J$984 million in 2021.        

The $805-million Sagicor bond attained in 2020 towards ‘Growth Capital’ continues to remain on the books due to the ongoing investments activities in the real estate acquired by Indies Pharma from the proceeds of the bond and also for the approval of two generic drugs at the US Federal Drug Administration for the America market.

Third quarter results

For the third quarter ended July 2022, the company recorded $265 million in revenues, an increase of J$57 million or 28 per cent to that of the corresponding period revenues of J$208 million in 2021. Gross profits for the quarter has increased to J$182 million in comparison toJ $144 million for the same quarter in 2021, a 26 per cent or J$38-million increase.

One of the main contributing factors is the robust approach taken in monitoring the inventory and supply chain in addition to mitigating the write off of the expired stock. Operating expenses increased by seven per cent to J$91 million for the current quarter in comparison to J$85 million of prior quarter, which was expected. 

This was due to an increase in the fuel cost, increased frequency of servicing and the contingent associated vehicle maintenance costs and, bad debt provision to some extent. Net profit for the three-month period has increased by 71 per cent to J$73 million, up from J$43 million during the same three-month period in 2021.