Indies Pharma ends strong despite inventory write-down

Indies Pharma Jamaica Limited reported a marginal decline in revenue but a near fifty per cent fall-off in profit for the final quarter of the year.

But CEO Guna Muppuri says the company did not do as poorly as the sluggish numbers suggest. It’s usually the period in which the pharmaceutical company books inventory write-offs, and this year Indies had to throw out stock that it had on hand to deal with the COVID-19 pandemic, he said.

“On average, every year we have a certain percentage in terms of expired goods. It was really one particular item that was related to the pandemic that we had to deal with and that was the sanitisers,” Muppuri said.

He added that the particular product carried higher rates of duty, hence the large write-off. The sanitisers were procured two years ago to deal with market needs. But the demand for sanitisers has now fallen, with the coronavirus now under a fair degree of control.

“It was just about two container loads of product brought in at the height of the pandemic. The market was saturated and we had that product for over two years,” he said.

The pharmaceuticals distributor wrapped up its fiscal year with $174 million of revenue, compared to $211 million at the end of the third quarter, and $222 million in the comparative period in 2021.

Revenue for the fourth quarter, August to October, dipped two per cent to $209 million, while net profit declined by 46 per cent to $38 million.

However, for the full year ending October, Indies Pharma outdid its 2021 performance by a quarter, its preliminary report shows. Profit improved by 26 per cent to $226 million on the back of an 11 per cent improvement in sales revenue to $937 million.

“This allowed us to exceed the projected net profit of 20 per cent, and earnings per share is about 21 per cent higher than it was last year,” Muppuri said.

The company is looking ahead to another good year in 2023, on expectations that Indies Pharma will likely to get FDA approval for a number of drugs that the company is developing. The approvals by the US Federal Drug Administration have been pending for some time, but Muppuri declined to comment on his renewed optimism, citing stock market disclosure roles.

neville.graham@gleanerjm.com