Neimeth Grows FY Profit to N270.6m on Decline in Borrowings

By Dipo Olowookere

The financial statements of a leading pharmaceutical company in Nigeria, Neimeth International Pharmaceuticals Plc, for the year ended September 30, 2021, have been released.

An analysis of the results by Business Post showed that in the year under review, the firm improved its turnover by 10.7 per cent to N3.1 billion from N2.8 billion in the corresponding period of 2020.

This was largely impacted by an increase in sales from pharmaceutical products (N2.8 billion versus N2.5 billion in 2020) amid a decline in sales of animal health products (N243.2 million as against N369.0 million).

It was observed that most of the revenues were generated from the Nigerian market, contributing N3.0 billion in the year under review versus N2.8 billion in 2020, while sales from Ghana only accounted for N35.3 million compared with N32.3 million a year ago.

In the year under review, the company recorded an increase in the cost of sales to N1.6 billion from N1.3 billion, resulting in a lower gross profit of N1.45 billion in contrast to N1.51 billion in the corresponding period of 2020.

In the financial statements, Neimeth disclosed that N202.0 million was generated from other income as against the N146.2 million recorded a year ago and this was largely because of the reversal of accrued interest on Daewoo loan of N57.3 million as well as the N4.9 million gains on disposal of property, plant and equipment.

However, the firm posted an increase in marketing and distribution expenses in the 2021 full year to N579.7 million from N505.1 million, just as the administrative expenses rose to N513.9 million from N452.3 million due to spikes in employee cost, adverts and promotions, communication and subscription, energy cost, medical expenses, telephone and postages, corporate expenses and others.

Despite these, the operating profit of the company jumped to N553.5 million from N510.2 million, while the finance costs went down to N188.2 million from N212.8 million as a result of a decrease in borrowings, leaving the debt-to-capital ratio for the period to 0.77 per cent versus 0.80 per cent a year ago.

The primary source of capital for Neimeth is borrowed funds from various financial institutions repayable with interest at specified dates.

In the period under review, the organisation closed with a profit before tax of N365.3 million versus N297.4 million in 2020, while the profit after tax grew to N270.6 million from N212.5 million, with the earnings per share (EPS) at 14 kobo compared with 11 kobo of the preceding year.