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Tuesday, March 28, 2023

Fidson Records Growth in Gross Profit on New Product Introduction

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On the back of price increases, volume growth, extended distribution networks and the introduction of new products, Fidson Healthcare Plc posted a year on year growth rate of 39.55 percent in gross profit.

Gross profit moved to N9.86 billion in the first six month of the year, the highest in more than a decade, based on data gathered by MoneyCentral.

Gross profit margin rose to 48.40 percent in the period under review from 46.17 percent in June 2021.

Gross profit margin is a ratio that indicates a company’s sales performance—specifically, the percentage of revenues left after you’ve deducted the cost of goods sold (COGS).

Gross profit margin is important because it shows if a company’s sales are enough to cover its costs. Creating a positive gross profit margin is what can lead to a net profit.

The improvement in profit margins has underpinned investor’s confidence in a drug maker who has been aggressively building factories across the country as it continues to set the pace for other pharmaceutical firms in the area of drug manufacturing.

These capital projects are contributing to earnings growth, which is why investors have been allured to the company’s stocks.

The drug maker’s shares have gained 20 percent so far this year, outperforming the NGAI index of 18.52 percent.

Operating profit spiked by 106.03 percent to N4.78 billion in June 2022 from N2.32 billion the previous year.

A member of the World Bank Group, the International Finance Corporation, partnered with Fidson Healthcare Plc to develop Nigeria’s capacity to produce active pharmaceutical ingredients.

“We see a strong case for expanding into API production in order to increase the availability of pharmaceuticals and close the gaps caused by supply chain disruption, especially due to the COVID-19 pandemic, across western Africa and the African continent at large,” said Fidelis Ayebae, Chief Executive Officer of Fidson Healthcare.

However, the company is still struggling with rising input as it imports most of its materials.

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