Fidson, May & Baker see biggest half-year profits in five years — amidst pandemic

Listed pharmaceutical companies recorded a significant boost in revenues and profits for the period ended June 30.

This can be explained: the demand for prescription drugs and other medical interventions surged on heightened health-consciousness amid the COVID-19 pandemic.

Analysis by TheCable shows that total revenue by three companies jumped 14 percent, while profits ballooned 96 percent in the first six months of the year.

In the three months April-June, Fidson, makers of Astymin, printed a 16.17 percent jump in revenue at N4.45 billion from N3.83 billion, net profit for the period under review surged 166 percent at N348.68 million from N131.04 million in 2019.

Fidson’s revenue for the first six months of the year increased 11.31 percent, to record the highest half-year revenue in the last five years, at N8.2 billion from N7.37 billion, with net profit skyrocketing by 81.43 percent to hit N500.64 million from N275.94 million half-year 2019.

For Neimeth Pharmaceuticals, nine-month result for the period ended June 30 showed revenue increased 42.12 percent from N1.41 billion in the third quarter 2019 to N2 billion in 2020, with net profit standing at N237.63 million from 31.07 million.

Also, within April-June, which is Neimeth’s third-quarter, revenue increased 93.94 percent to N840.87 million from N434.59 million, net profit within the three months ballooned by 606.32 percent at N181.03 million from N25.63 million in 2019.

May & Baker‘s revenue in April-June increased slightly 2.57 percent to N2.24 billion from N2.18 million, net profit increased 151.91 percent to N396.09 million from N157.24 million. Six months revenue increased 11.31 percent to N8.2 billion from N7.37 billion, net profit also increased N50.9 percent to N438.89 million from N290.83 million.

Interestingly, while the pandemic dragged activities in major sectors of the economy, drug makers have the pandemic to thank for putting them back on the path of profitability.

The huge deficit of local medical supplies and pharmaceutical products meant investment opportunities for the sector players, also a substantial amount of intervention by the Central Bank of Nigeria to healthcare companies as part of a stimulus package to manage the health crisis, which included access to N100 billion fund, as well as lower borrowing rates, came as a boost to most companies in that sector thereby raising investor’s appetite in their stocks.

Shares of Fidson, May & Baker have gained double-digit year-to-date, while Neimeth gained over 200 percent year-to-date as at September 14.

In an industry laden with several landmines, the last few years have been a challenging period for drug-makers in Nigeria. Some such as Evans Medical have shut down operations, others lucky to be alive are still struggling to stay afloat in a challenging macro-economic environment, worsened by the scarcity of foreign exchange to import raw materials as most players still depend largely on imports, and cash strapped consumers. 

Drugmakers have also battled the impact of drug smuggling  through the nation’s porous border posts, while drug faking and adulterated medicines continue to thrive in quack medicine kiosks and roadside shops.