Sales climb, profit falls at Medical Disposables
Medical Disposables & Supplies Limited (MDS) suffered from a shortage of stock during its first quarter ending June, which led to a dip in profits.
Earnings per share for the quarter totalled $0.06 versus $0.07 a year earlier.
"This was mostly attributable to the pharmaceutical division, which experienced out-of-stock situations from major drug houses and above-average seasonal market activities," stated the company in a statement prefacing the financials signed by Director and General Manager Kurt Boothe.
Net profit of $15.7 million decreased by $2 million or 11.8 per cent. The company's demand for inventory is such that during the quarter, MDS expensed $111.6 million on inventories in its cash flow statement, or nearly tenfold the $11.6 million a year earlier. The rise in inventory spending resulted in the company recording negative $54.7 million in cash and equivalents compared to negative $8.4 million in June 2016.
The company generated sales revenue of $480.6 million or 13 per cent higher when compared to the same period last year. The rise was due to the company's strategy of widening its customer base and increasing market share.
"This improvement resulted from increased sales arising from the introduction of new business lines," said Boothe. "This positive performance was driven by the company's strategic plan to increase its market share, through increased product offerings and the widening of the customer base in all categories of the company's business operations."
Total operational expenses of $79.9 million increased by $11.1 million or 16.1 per cent, due mainly to staff-related expenses, depreciation and amortisation, insurance, utilities, and security expenses, the company stated.
"Staff-related expenses, in particular, increased because of the strategic decision to realign the staff complement and compensation to sustain the current growth, development and expansion of the business," Boothe added.
The company's total assets stood at $1.36 billion with total equity at $579.2 million.
MDS, formed in 1998, operates from Hagley Park Road in Kingston. Its main activity is the distribution of medicine and disposable items for hospitals. The company listed on the junior market of the Jamaica Stock Exchange in December 2013. MDS is currently valued on the stock market at $1.45 billion of $5.53 per share.