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Cipla recovers 5.6% of Zambian debt worth Shs 42.9bn

The company recorded Shs 2.8billion profit for the half year period

Kampala, Uganda | ISAAC KHISA | Uganda’s drug manufacturer, Cipla Quality Chemicals Ltd, recovered Shs 2.5billion from the Zambian government for the drugs supplied in 2018, helping the company to record a profit from the second time since listing on the stock market.

Listed on the Uganda Securities Exchange in 2018, Cipla now demands the southern Africa country nearly Shs 40.4bn in arrears.

“We continue to work towards recovering the outstanding dues from GoZ… We do not have a firm commitment as to when the entire balance will be settled but the GoZ continues to recognize the outstanding dues and we continue to work with them to receive the unpaid balance,” Cipla’s Board Chairperson, Emmanuel Katongole and the new CEO, Ajay Kumar Pal, said in a joint statement accompanying the company’s half year results for the year 2021/22.

Cipla’s total comprehensive income improved by Shs 19.1 billion from a loss of Shs 16.3 billion in the first half of 2020/21 to post a  profit of Shs  2.8 billion citing recovery of part of Zambian debt and increase in sales.

Cipla’s share price on the USE is currently trading at an average of Shs95 down from Shs 256.5 per share during the IPO in 2018

The company’s revenue remained stable at Shs124.3 billion compared to Shs 122.6 billion during the period under review. Local sales increased by 47.6% from Shs 52.7 billion in the first half of last year   to Shs 77.7 billion due to a faster draw down of confirmed local contracts.

Exports declined by 33.4% from Shs 69.9 billion to Shs 46.6 billion due to the non-recurrence of emergency orders received at the peak of the COVID-19 pandemic last year.

However, general and administrative costs increased by 17% from Shs 20.6 billion in the first half of last year to Shs 24 billion. Finance costs, meanwhile, reduced by 12.9% from Shs 1.7 billion to Shs 1.5 billion due to better management of overdraft facilities and reduced interest rates as the net cash used in investing activities reduced from Shs 8.1 billion to Shs 2.5 billion following the completion of acquisition of the human pharmaceutical business from QCL and equipping the new quality control laboratory in FY21.

The company executives said private market business segment that commenced last year continued to deliver encouraging growth and margins, with the product offering being expanded to respond to Ugandan patients’ demands in line with their purpose of ‘Caring for Life.’

The company also received new orders for the Democratic Republic of Congo which will be serviced in Q3 FY22 as well as received approval of its first line treatment, TLD, in Kenya.

Similarly, it also concluded a quality and compliance audit by the ZAZIBONA – a collaborative procedure for 14 Southern African Development Community (SADC) countries – thereby retaining approval of the products in the South African countries.

“… the Board of Directors approved an entry into the oncology space in response to the growing demand for cancer and sickle cell anemia medicines in Uganda,” it  said, adding that it plans to construct a new factory focused on oncology products targeting both the Uganda and African markets.”

Cipla is also revealed that technology transfer of Azithromycin 500mg has been completed, and the product will be launched in Q3 FY22.  Two other products whose technology transfer is set to be completed during the same period include; Q-TIB for prophylaxis of TB and Cipladon+ for pain management.

Established in 2005, Cipla focuses primarily on the production of quality World Health Organisation pre-qualified first-line treatments for HIV/AIDS and Malaria.

The company also manufactures the two first-line WHO-recommended therapies for Hepatitis B and obtained regulatory approval for the new first line triple combination ARV therapy for males, tenofovir lamivudine dolutegravir from Uganda’s National Drug Authority (NDA).

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