Indies Pharma faces shipment delays but profit increases

Indies Pharma Jamaica Limited continues to improve its net profit in spite of shipment delays and reduced sales. 

While shipment delays and reduced sales have affected Indies Pharma, the company has seen its net profit improve in the recent quarter. (Photo: Harvard Health)

The company made J$50.64 million in net profit in the quarter ended July 31, compared to J$33.61 million for the similar period in 2019.

Profit for July quarter was made on revenues of J$565.83 million, representing a decrease of 1.7 per cent or J$9.98 million over the corresponding period in 2019.

For the nine-month period, profit was J$159.48 million compared to J$118.24 million in the similar period in 2019.

Lower sales in the company’s third quarter resulted from the delay in shipments due to COVID-19 which led to items being out of stock, said Vishnu Muppuri, executive director and chief operating officer, in remarks attached to the results.

Though revenue was decreased, growth and profitability for the nine-month ended improved.

Administrative and other expenses decreased by J$29.693 million compared to the same period in the prior year.

Muppuri said this was mainly due to the decline in rent, vehicle expenses, IT, security, and lack of one-off expenses such as interest penalty.

 Earnings per share (EPS) for the nine-month period increased to J$0.12c per share compared to J$0.09c per share in the prior period 2019.  

Liabilities increased by 754 per cent or J$498.280 million, predominantly due to loan for the purchase of land which will be used for the construction of its corporate office and also, the adoption of IFRS 16 ‘leases’ which requires the lessee to record a liability for the remaining contractual life of the lease payments.

Muppuri said the company’s liquidity position remains healthy with a current ratio of 1.27:1, meaning that the company has J$1.27 of current assets for every J$1 of current liabilities.

The current return on equity (ROE) is 21.5 per cent compared to 17.4 per cent in the similar period in the prior year.

He said, “This shows a strong indication of how well Indies Pharma Jamaica Limited is managing its assets to create profits.

The company paid out total dividends of $186.56 million on the 30 July 2020.

Shareholders’ equity increased by 8.6 per cent or J$58.56 million when compared to the similar quarter in 2019, due to the revaluation of company’s asset and an increase in retained earnings for the period.