May & Baker Plc, a leading player in the fast moving consumer goods (FMCG) industry and health care space has recorded improvement in its bottom-line at the end of first quarter 2018 following reduction in operating cost.
Despite a 0.57 percent limp in revenue, the drug maker reported a 488.03 percent surge in profit after Tax to N141.9 million from N24.1 million the same period last year.
Revenue from sales crawled by N13.604m from N2.305bn in the corresponding period of 2017 to N2.375bn, driven by the pharmaceuticals segment, which contributed N2.163bn or 91.05 percent of total revenue; up from N1.854bn or 78.52 percent of prior Q1.
The Beverage segment followed with N18.748m, up from N15.342m, while the foods segment dipped 153.9 percent from N491.932m, to N193.745m.
By geography, sales revenue from the company’s eastern Nigerian market remained the biggest contributor at N879.483m, even as it dropped to N999.796m; Lagos accounted for N770.054m, up from N754.335m; ahead of N413.51m from western Nigeria, from N362.103m; while N312.713m came from the north, as against N245.922m in 2017Q1
May & Baker share price has risen 9.23 per cent this year, outperforming the NSE All share index at 7.42 percent, according to data compiled by BusinessDay.
It was priced at N2:80 as at the close of trading in Lagos on Monday, with a market capitalisation standing at N2.783 billion.
Businessday had earlier reported an N775m deal between May&Baker and – De-United Foods Industries Limited (DUFIL), owners of Indomie Noodles, where the former sold a 100 percent stake of its food production line to the latter.
The drug maker exclusively disclosed to Businessday that divestment from the Noodles business, provides much needed cash for the company, and will also reduce the losses hitherto contributed by this unit by helping management refocus on its new corporate vision which is “to be a leading healthcare brand in Sub-Saharan Africa”
Further analysis shows that Cost of sales dropped slightly to N1.628bn, from N1.678bn; leaving gross profit of N747.368m, compared to N683.731m reported in the previous Q1. While the pharmaceutical segment contributed N783.231m to gross profit, up from N613.404m in 2017Q1;
The beverage segment posted a N1.307m loss, down from N2.206m in 2017; which was minute when compared to the N34.556m loss from the food business from a profit of N72.533m.
Other operating income rose to N3.58m from N1.179m, representing miscellaneous income earned on insurance claims received from HUGG Robinson and BCM Insurance Broker, besides being part of income from sale of waste box, waste sugar cartons, flour bags, waste sacks, pallets, woods, bottles, etc. Distribution, sales and marketing expenses fell to N292.612m from N308.457m;
While administrative expenses fell from N143.636m in 2017 to N136.94m. Operating profit therefore climbed to N321.396m, up from N232.817m, representing an N88.579m or 38.04 percent growth.
Profit before tax for the period stood at N208.762m from just N35.502m, while tax expenses jumped five-fold from N11.361m to N66.804m, resulting in net profit of N141.958m, as against the N24.141m in the 2017Q1.
The net profit translated to Earnings per Share of 14.49 kobo, as against the previous 2.46 kobo; just net profit margin for the period improved to 5.97 percent, compared to 1.02 percent.
Total asset also dropped 15.88 percent to N7.5bn, while liabilities slipped from N5.9 billion to N4.01 billion.
MICHEAL ANI
