Companies
Mecure’s pre-tax profit hits N916 million in Q1 as company begins production of ‘Augmetin’ alternative
Mecure Industries, which is listed on the Nigerian Exchange Group (NGX) in the fourth quarter (Q4) of 2023, has posted first quarter (Q1) 2024 financial results.
The company recorded a pre-tax profit of N916 million during the period under review, representing a 61% growth year-on-year growth from N570 million reported in Q1 2023.
Mecure’s revenue during the quarter hit N8.1 billion, marking a 47% YoY from the N5.5 billion revenue posted in Q1 2023. In the first quarter of 2024, the company’s cost of sales hit N5.4 billion, leading to a gross profit of N2.7 billion. This marks a 41% year-on-year increase from the N1.9 billion gross profit recorded in the same period of 2023.
Key Highlights Q1 2024 vs Q1 2023
- Revenue: N8.1 billion, +47% YoY
- Cost of sales: N5.4 billion, +50% YoY
- Gross profit: N2.7 billion, +41% YoY
- Operating expenses: N1 billion, +17% YoY
- Operating profit: N1.7 billion, +63% YoY
- Profit before tax: N916 million, +61% YoY
- Profit after tax: N641 million, +61% YoY
- Earnings per share: N0.16, +60% YoY
Commentary
Mecure Industries listed on the NGX on November 8, 2023, with a market capitalization of N11.8 billion. Since then, the company’s market value has appreciated by 228% to N38.9 billion.
Since its listing, the pharmaceutical company, which is in the business of manufacturing over-the-counter (OTC) medicines, nutraceuticals and dietary supplements, has achieved remarkable financial performance. The group posted a revenue of N31.8 billion in FY 2023, marking a 19.2% growth from the N26.6 billion recorded in FY 2022.
The company’s cost of sales for Q1 2024 was majorly driven by a 49% YoY increase in the price of raw materials to N4.76 billion, from N3.2 billion as of Q1 2023. Increased customs duty and the knock-on impact of FX rate fluctuations were identified as the sources of the hike in the cost of raw materials.
Mecure to manufacture ‘Augmentin’ alternative
Mecure aims to step in to fill a huge gap in the pharmaceutical industry after GSK’s departure from Nigeria’s market. With the completion of its Beta-lactam plant, Mecure has reportedly obtained approval from the National Agency for Food & Drug Administration (NAFDAC) to commence production and sales of its Amoxyclav 625mg tablets.
It is noted that Amxoyclav’s active pharmaceutical ingredients, Amoxycillin and Clavulanic acid are also the major active pharmaceutical ingredients (APIs) in GSK’s Augmentin. This marks the first locally produced alternative to Augmentin since the exit of GSK.
Mecure’s Co-CEO, Mrs Anderline Dukor, noted concerning the production of Amoxyclav,
“In the first quarter of this year, we reinforced our commitment to delivering exceptional value to stakeholders in the pharmaceutical industry. This commitment was underscored by the commencement of production of Amoxyclav tablets, the first locally manufactured alternative to antibiotic tablets, and are glad to have received NAFDAC’s approval to commence sales.”
Co-CEO, Arjun Udani, commenting on the company’s Q1 2024, noted that Mecure has secured a new BOI facility below market rates.
He noted, “Additionally, we secured a 7-year Bank of Industry (BOI) facility with a significantly lower interest rate than prevailing market rates. This facility, expected to take full effect in the second quarter of the year, will be utilised for further expansion, further solidifying our position as a leading pharmaceutical manufacturing company in the market.”
