The company recorded the first profit since listing on Uganda Securities Exchange in 2018
| THE INDEPENDENT | Cipla Quality Chemical Industries has reported a better performance for the period ended March 31, 2022, posting a net profit of Shs24bn compared to a loss of Shs10bn in 2020.
This performance was supported by largely a cut in costs. Total revenue, however, declined from Shs284bn to Shs267bn, while total costs went down from Shs229bn to Shs196bn in the same period under review.
Taxes paid to government increased from Shs840m to Shs13bn in the same period under review.
The company’s Chief Executive Officer Ajay Kumar Pal said their main goal for the year was to return to profitability and create value for shareholders.
“Despite the COVID-19 pandemic and the impact of the geopolitical situation on cost of doing business, the greatest achievement was returning to a profitable position,” he said.
“It is the first time since listing on the Uganda Securities Exchange that we have registered a net profit. We improved our fundamentals of doing business and it reflects in our performance.”
He said the company officials live with a purpose of providing quality, affordable medicines to patients underpinned by their ethos of caring for life and ensuring that staff are always safe.
Additionally, the company’s earnings before interest, tax, depreciation and amortization (EBITDA) rose to Shs48 billion compared to the previous year’s position of Shs1billion. Excluding the impact of Zambia collection, EBITDA was Shs29billion.
Kumar said, signing of a Memorandum of Understanding with government of Uganda to set up an anti-cancer product manufacturing facility, was an important step as will contribute to future growth and service to humanity.
The Company further boosted its product range by launching two locally manufactured therapies outside HIV, Malaria and Hepatitis B.
Kumar said the period under review has been all about building a strong base from which they could grow.
“We worked on three fronts; improving our gross margins, reducing our cost of operations and collection of overdue amounts and it reflects in our results,” he said.
He explained that improved profitability translates into better value to their stakeholders and improved sustainability for the business.
Return on equity rose to 15% recovering from a loss position in the previous year. Earnings per share closed at approximately Shs7 compared to a loss of about Shs 3 in the previous year.
Subject to the approval of the shareholders, the directors recommended a dividend payment of Shs 2 per ordinary share for the year translating into Shs 7.3 billion.
Kumar said, the biggest challenge was to retain customers that made emergency orders due to COVID 19 supply chain disruptions in their countries. The company felt the impact on its revenue which declined slightly as earlier indicated. The other challenge is the increased cost of doing business due to Covid-19 and the geo-political situation.
Going forward, Kumar said, management will continue to build on the profitability achieved in FY2021-2022. He said, the company has plans to diversify its portfolio with local manufacturing of new products in different therapeutic areas such as pain, anti-infectives, cardiovascular and diabetics which will be enablers for growth.
“Market expansion especially in the export segment and the private sector will continue to be a focus area and construction of the anti-cancer plant will be another key priority in the coming year,” Kumar said.
He added: “and we will continue to bring lifesaving treatment for patients in need, made in Africa for Africa.”