MeCure Industries Plc, a leading human therapeutic and pharmaceutical manufacturing company, recently listed on the Growth Board of the NGX, has announced its full-year audited results for the period ended 31 December 2023.
Revenue increased to N31.8 billion, having increased by 19.2 percent year-on-year compared with N26.6 billion in 2022.
The growth was attributable to a combination of an increase in volumes sold as well as an increase in average unit prices reflective of ongoing macro and industry dynamics.
This growth underscores successful market penetration by MeCure through effective marketing, product innovation and expansion in the product portfolio such as the production of additional tablet lines, Beta-Lactam Capsules as well as Nutraceuticals.
Some of these new product lines, such as the oncology and chronic medicines product segments, are set to address the heavy double disease burden of non- communicable, lifestyle illnesses as well as communicable diseases in Nigeria.
Cost of sales increased to N21.5 billion (+20.7% y-o-y; FY 2022: N17.5 billion).
This was mainly due to: Raw Materials costs (89.9% of COS) which increased to N19.3 billion (+24.2% y-o-y; FY 2022: N15.5 billion) arising from higher production volumes and price escalation due to the inflationary environment.
Depreciation on machinery expenses (7.8% of COS) which rose to N1.7 billion (+35.2% y-o-y; FY 2022: N1.2 billion), driven by equipment acquisition to support our product expansion strategy.
Other direct expenses (4.5% of COS) which increased to N0.9 billion (+84.4% y-o-y; FY 2022: N0.5 billion) due to price inflation and higher activity levels.
From the foregoing, gross profit rose to N10.3 billion (+16.2% y-o-y; FY 2022: N8.9 billion) however, faster growth in the cost of sales relative to revenues led to FY 2023 gross margins of 32.38% (-84 bps y-o-y, FY 2022: 33.22%).
Total operating expenses rose to N4.3 billion (+20.7% y-o-y; FY 2022: N3.6 billion).
This was driven by: Marketing expenses (27.0% of total operating expenses) which increased to N1.1 billion in FY 2023 (+19.5% y-o-y; FY 2022: N0.9 billion).
Administrative expenses (73.0% of total operating expenses) increased to N3.1 billion in FY 2023 (+17.3% y-o-y; FY 2022: N2.6 billion).
One significant factor contributing to the rise in administrative expenses was the fluctuation in foreign exchange rates – N0.3 billion (+45.5% y-o-y; FY 2022: N0.2 billion).
Employee costs increased to N0.6 billion (+26.6% y-o-y; FY 2022: N0.4 billion).
Other expenses increased to N0.5 billion (+15.4% y-o-y; FY 2022: N0.4 billion).
Regulatory expenses reduced to N29.2 million (-68.2% y-o-y; FY 2022: N91.9 million).
Operating profit for the year increased to N6.1 billion (+ 15.7% y-o-y; FY 2022: N5.3 billion) while operating profit margin decreased by 58.2 bps to19.1% (FY 2022: 19.7%).
Cost efficiency marginally decreased to 41.1 percent (-46.6 bps3 y-o-y; FY 2022: 40.6%). Other income for the period was N35.5 million (FY 2022: Nil) comprising of interest income of N18.5 million and sales of scrap inventory of N17.1 million.
The Co-Chief Executive Officer (Finance and Accounts, Logistics, Procurements and Stores), Arjun Udani, commenting on the results said, “In the year 2023, our company experienced substantial growth and progress, despite a difficult macro-economic environment evidenced by high inflation, tighter monetary policies, and foreign exchange volatility. MeCure Industries continued to focus on growth through our product and capacity expansion as well as efficiency, which resulted in 11.7% increase in our Profit after Tax. We also democratised the Company’s value creation through our successful listing on the NGX Growth Board which will enhance access to capital, collaboration, partnerships, and strategic alliances to further strengthen our position in the healthcare sector. “
Co-Chief Executive Officer (Regulatory Affairs, Manufacturing Quality Control & Assurance, and Human Resources),Mrs. Anderline Dukor, commented on the full-year audited results saying, “Over the course of the year, we have demonstrated our unwavering commitment to delivering exceptional value to stakeholders in the pharmaceutical industry evidenced by our commencement of the construction of Nigeria’s first and only Corticosteroid manufacturing plant aimed at the production of two new drug lines. We also collaborated with the National Agency for Food & Drug Administration (NAFDAC) to develop a pioneering Track and Trace solution, showing our commitment to product authenticity and the safety of our consumers. MeCure is conscious of the double burden of disease facing the Nation and continues to position itself with the capacity and technical know-how to alleviate these challenges while meeting the standard of quality and affordability required by Nigeria’s growing populace. With confidence, we look forward to sustaining our growth trajectory in the year 2024, as we continue to make meaningful contributions to healthcare and well-being.”
