Neimeth posts net profit of N207.1m

Neimeth International Pharmaceuticals Plc regained strong growth momentum in the second quarter of its current business year as significant growth in sales and improved cost efficiency reversed the loss in the previous quarter with a net profit of N207.1 million.
Key extracts of the interim report and accounts of Neimeth for the second quarter ended March 31, 2021, released at the Nigerian Exchange (NGX) Limited, showed that sales rose by 58.8 per cent within the three-month period while gross profit and operating profit grew by 76.6 per cent and 652.77 per cent.
Turnover rose to N887.01 million by March 2021 compared with N558.69 million recorded by March 2020. Gross profit rose from N250.56 million in 2020 to N442.38 million in 2021. Operating profit leapt from N28.9 million in March 2020 to N217.55 million in March 2021. As against net loss of N26.06 million by March 2020, the company ended March 2021 with a net profit of N207.1 million. With these, earnings per share for the three-month period ended March 31, 2021 stood at 10.9 kobo as against loss of 1.37 per share recorded by March 2020.
The report showed improvements in underlying profit-making ability of the healthcare company with gross profit margin rising from 44.85 per cent in March 2020 to 49.9 in March 2021. Operating profit margin quadrupled from 5.17 per cent in 2020 to 24.53 per cent in 2021. As against average loss of N4.67 on every unit of N100 sales in 2020, the company made an average of N23.35 per every unit of sales in 2021, with net profit margin of 23.35 per cent in March 2021 as against 4.67 per cent net loss recorded in March 2020.
The latest operational report comes on the heels of the recent award of Neimeth at the 2021 Nigerian Investors Value Award (NIVA) as the best performing stock in the healthcare sector of the Nigerian capital market. It was the third time since 2019 that the company has won similar award based on the performance of quoted companies on the capital market, beating other leading quoted pharmaceutical companies.
Managing Director, Neimeth International Pharmaceuticals, Matthw Azoji, said the second quarter results underlined management’s combined strategy of growing market share while simultaneously creating value for shareholders.
He said Neimeth’s stable growth trajectory affirms the success of its business model, noting that the company remains committed to its vision of becoming a manufacturing hub for medicines and centre of excellence for pharmaceutical development in Africa.
He pointed out that the company’s growth plan which included investment of some N5 billion in capacity expansion, will lead to greater value creation for stakeholders.
Shareholders of Neimeth recently approved a plan to inject fresh capital of N5 billion to fund the construction of a World Health Organisation (WHO) standards of Good Manufacturing Practice (WHO cGMP) pharmaceutical manufacturing facility at Amawbia, near Awka in Anambra State.
Azoji had explained that the facility would be a multi-products plant and will be presented to the WHO for certification in line with her current standards of cGMP.
“When this is done, the plant will offer foreign and local contract manufacturing services for drug production, research and development, formulation and validation services, among others,” Azoji said.
He added that local and international brand owners will be encouraged to use the facility for manufacturing of their products at the same standards obtainable anywhere in the world.
The latest results showed a stable outlook after Neimeth made its first dividend payment in nearly a decade in 2020. The company paid a dividend of 6.5 kobo on every 50 kobo share for the 2020 business year, signaling the return of the healthcare company to annual dividend payment.
The audited report and accounts of Neimeth International Pharmaceuticals for the year ended September 30, 2020 had shown that turnover rose by 20 per cent to N2.84 billion in 2020 as against N2.37 billion recorded in the comparable period of 2019. Gross profit rose by 26.9 per cent from N1.19 billion in 2019 to N1.51 billion in 2020.
Despite the tough operating environment due to the COVID-19 pandemic and industry-specific challenges, the company sustained considerable bottom-line with profit before tax of N297.39 million compared to prior year figure of N304.44 million. After taxes, net profit stood at N212.48 million, implying earnings per share of 11 kobo per share.
The balance sheet of the company also emerged stronger with total assets rising by 134.2 per cent from N2.75 billion in 2019 to N6.44 billion in 2020. Shareholders’ funds grew by 18.7 per cent from N1.07 billion in 2019 to N1.27 billion in 2020. The Nation.