7 months ago
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Pharmaceutical trader Indies Pharma Jamaica Limited’s performance was moderate in the first quarter ended January but below expectations.
CEO Guna Muppuri blames inflation for the company’s missed targets. He also points to stock-outs occasioned by late deliveries of imports from their suppliers.
Sales grew five per cent year-on-year, from $255.64 million to $269.38 million. However, that performance was half the 10 per cent growth targeted by the Montego Bay-based company.
Muppuri said that in December, Indies Pharma suffered “an out-of-stock situation on certain drugs” due to the late arrival of its shipment that left the company down about 30 per cent on supplies in its warehouse. The shipment did not arrive until late January, Muppuri said.
“Now our warehouse is full to the brim,” he said.
“We have strategies in place so that the stock won’t be ageing out on us. We’re managing that carefully.”
Sales took a hit in December because of the shortage of inventory. That plus higher costs for salaries, maintenance of motor vehicles that are essential to deliveries, and the cost of fuel and utilities, served to dampen the company’s earnings.
Muppuri said that in recognition of the hardship brought on by inflation, the company granted a salary increase to all staff, except senior management.
“They all got a good salary hike, because a happy employee is critical to any business,” Muppuri said.
Administrative and other operational costs rose by around 30 per cent year-on-year, moving from $99.62 million in the first quarter of 2023 to $129.25 million in the 2024 period. Indies Pharma also missed its projected 20 per cent target for profit growth, with earnings after taxes climbing by less than six per cent to $62.48 million.
The junior stock market company, which listed in 2018, is now subject to a tax rate of $12.5 per cent, pushing its comparative tax bill from zero to $8 million this period. Junior market companies on the Jamaica Sock Exchange get a full waiver on taxes for the first five years of listing, and 50 per cent for the next five. In return, they must stay listed for at least 15 years.
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