Indies Pharma profits dip after listing
In its first annual report after listing on the junior market of the Jamaica Stock Exchange, Indies Pharma is showing a dip in profits despite a bump in revenues. A $20.5-million, or 14.52 per cent, decrease in profits wiped out a $15.82 million, or 2.55 per cent, increase in revenues at the end of October 2018 compared to the similar period in 2017.
The decrease in profit was mainly attributable to an increase in expenses, which moved up by nearly $50 million, or 11.5 per cent, driven mostly by a $34.6-million year-on-year increase in cost of sales.
An increase in administrative and other expenses was not as large, but was no less significant. Those expenses moved from $224.86 million at the end of October 2017 to $239.87 million at the end of October 2018, or an increase of $15 million, with wages and salaries taking the lion's share, moving up by nearly $7 million.
Indies Pharma went after $387 million in its initial public offering in July 2018, an offer which closed one day after opening. The company was valued at $2 billion and currently distributes around 175 pharmaceutical products through retail channels and in collaboration with Jamaica's National Health Fund. It also operates its own pharmacy called Trident at Sam Sharpe Square, Montego Bay, St James.
Indies Pharma had planned a number of bold moves, including September 2018 reports that the company was planning to move into new headquarters in Ironshore, Montego Bay, by year end. The company also touted acquiring, or at least taking a position in, one of its suppliers located in India.
CEO and co-founder Guna Muppuri was not available for comment and did not respond to messages left seeking an update on the company's plans going forward.
Indies Pharma appeared to have been affected by foreign currency fluctuations. The company took a $4.48 million hit via exchange losses. The Bank of Jamaica reports that the weighted average selling rate of the US dollar was $129.59 at the end of October 2018, whereas at the end of June it was $130.29 and peaked at $137.96 on August 23, 2018.
The company's total comprehensive income at the end of October 2018 stood at $119.7 million. This translated to earnings per share of nine cents compared to 12 cents for the similar period in 2017. The company will consider payment of dividends at its January 18, 2019 board meeting.