Despite the harsh economic conditions, May & Baker Nigeria Plc, a manufacturer and distributor of pharmaceutical products, has posted a revenue of N14.3 billion from January to September, 2023.
This represents a 38 per cent cumulative growth on the topline, compared to N10.5 billion posted the previous year (January to September 2022). On the bottom line, the company profit before tax (PBT) grew in comparison from N919 million in 2022 to N1.7 billion at the end of September 2023, representing a 147 per cent achievement against the budget of N1.1 billion.
Commenting on this year’s performance, the managing director/CEO, May & Baker Nigeria Plc, Mr. Patrick Ajah, at the company’s end of year media parley, in Lagos, averred that this year’s brilliant performance was however severely impacted by huge losses due to the floating of the naira.
Recall that barely a month after the removal of fuel subsidy, the government, in an attempt to switch to a unified, market-reflective foreign exchange (FX) rate, decided to float the naira. Instantly the exchange rate moved from the official rate of N460/$ to ranges of N800 to N1099 and the parallel market went above N1300/$ at some point. Inflation has risen to 28.9 per cent at the end of November which is the highest since August 2005.
The harsh economic conditions orchestrated by this policy and others, have not only crippled the operations of many small and medium pharmaceutical companies but has also forced some multinational pharmaceutical companies to shut down operations, Ajah lamented, adding that, “You may have noticed that our reported figure for PBT at the end of Q3 was less than N1 billion. This was as a result of the impact of the projected forex loss of more than N800 million. This to me was and avoidable economic disruption.
“A detailed look into our numbers will show the impact of the cost of goods and operational costs on the profits. Our cost of goods grew by 35 per cent despite a significant reduction in the cost of raw materials post-COVID-19 disruptions. We have also seen a significant increase in the cost of power and custom duties as they are denominated in US dollar.”
As effort to mitigate against these rising costs, Ajah disclosed that the company has implemented reasonable cost saving initiatives, adding that, “We have by so doing managed to close our operating expenses and administrative costs at 14 per cent and 21 per cent below budget respectively at the end of September, as a way of helping to reduce the impact of the high cost of operation while growing our staff strength to meet the requirements of our growing business.
“We have however made some significant improvements in our revenues since the end of Q3, and I am confident that we will be able to recover the losses and potentially meet the budgeted PBT while exceeding the budget on revenues and delivering a strong growth over last year.”
He however appealed to the government to intervene as the manufacturing sector which should be the driver of the economy is being decimated by these policies. “The result is that a number of blue-chip companies declared losses at the end of Q3 as a result of the Fx losses and high cost of operation,” he stated.
Speaking on 2024 plan, Ajah disclosed that the pharmaceutical company is making investments towards new product developments across a broad range of therapeutic areas, adding that, “We are on track to launch at least seven new products next year with several more in the pipeline, at different stages of registration or development.”
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