May & Baker grows full year profit by 75%

Nigeria’s oldest Pharmaceutical company, May & Baker Nigeria Plc. has recorded an impressive growth in its performance for 2017.

According a press statement made available to Nigeria Health Online (NHO) after the Company’s Board meeting in Lagos recently, the growth is evident in the consolidated audited statement of the healthcare group for the year ended 31 December 2017.

Following this results, the Board has okayed a 233.3% increase in cash dividends (N196 million) to shareholders of May & Baker.

The report however stated that in 2017, a year where double-digit inflation rate was prevalent in Nigeria, May & Baker sustained high growth in both pre and post-tax profits. The group returned a profit before tax of N605.6 million.

This showed that profit rose by 75% above the previous year’s figure of N346 million. However, the profit after tax for the current year stood at N371 million. This leapt from N41 million after tax loss in 2016 – a year of seething recession.

According to the report, the results showed that the revenue grew by 10% from N8.5 billion in 2016, to N9.4 billion current year. However, cost of sales grew marginally by 2% from N5.9 billion prior year to N6.1 billion in the year under review due to increases in materials’ high power costs. The company resolutely waded through market variances to generate a 29% growth in gross profit from N2.5 billion in the previous year to N3.3 billion in the current year.

“The 2017 operating expenses swelled by 26.5%, posting N1.4 billion against the previous year’s cost of N1.1 billion while Finance cost increased by 22% from N519million last year to N635million present year. This was largely driven by the cash backing requirement for LCs and import financing.

“Having operated in Nigeria’s pharmaceutical industry for about 74 years, May & Baker has remained a viable attraction for investment especially as the company’s operational efficiency continues to increase year-on-year. This is manifested in the financial outlook of the company’s five-year comparative results of pre- tax profits.

“In 2013, the group posted a PBT of N11million loss and then bounced back to record a phenomenal N101.17 million profit, the following year. Despite the 2015 “political headwinds”, the company grew its PBT to N142.40 million and then withstood the 2016 scorching recession to announce N345.94 million as PBT. The 2017 profit before tax stands at N605.62 million.

“Accordingly, the earnings per share have been gaining prominence. The earnings per share which trended at 0.04kobo loss in 2016 jumped to 38kobo gain in the current year. Moreover, the share value of May & Baker continues to soar. From 90k in January 2017, it recorded over 350% increase from mid-year through the third quarter. This was boosted by the announcement of the ratification of the Joint Venture Agreement between the Federal Government and May & Baker to produce vaccines in Nigeria. The share value trended around N3 at the close of 2017.

“The increase in sales and bottom-line underscores the success of ongoing management’s initiatives aimed at optimizing the synergies from its new business units and recent divestments. It also raised the prospects of good returns in the ongoing business year” the statement said.

Commenting on the company’s outlook for the new business year, the Managing Director, May & Baker Nigeria Plc, Mr. Nnamdi Okafor, holds the projection that both the global and the local economy will grow in 2018 and May & baker will connect with this growth.

He stated that, “the Company will remain focused on its long-term goal of strengthening existing investments and expand new business areas so as to continue to create new opportunities that will grow value and long term returns to all our stakeholders.

“May & Baker has a great pedigree and is poised to play beyond the boundaries of Nigeria and break into Sub-Saharan Africa. To drive this, we will continue to acquire necessary competences, engage pertinent partnerships and then keep leveraging our installed capacity at the pharmaceutical facility in Ota to the fullest so as to improve on our numbers year-on-year.”

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