Fidson Posts 32% Profit Drop in H1 2016

Fidson Healthcare Plc has posted a 32 per cent decline in the company’s turnover in the first half of 2016, stating that the low sales figure was as a result of unavailability of products, a direct consequence of the scarcity of foreign exchange shortage experienced by the manufacturing sector during the period.

According to the management, Fidson only accessed 30 per cent of its foreign exchange needs in the first six months of the year. The paucity of foreign exchange, for the importation of products and essential raw materials, and macroeconomic headwinds were disruptive to the manufacturers in the pharmaceutical industry including the company’s business.

Key extracts of the six-month half-year report for the period ended June 30, 2016 showed that sales dropped by 32 per cent from N4.032 billion in first half 2015 to N2.61 billion in first half 2016. Profit-after tax also declined to N39.582 million in 2016 as against N324.206 million recorded in the comparable period of 2015.

Fidson’s growth strategies are premised on the recent move to the company’s new World Health Organisation Good Manufacturing Practice (WHO-GMP), where local production recently commenced. The newly completed state-of-the-art facility will provide several benefits including increased profitability, increased efficiency from economies of scale, increased product offerings as well as job creation with an additional 300 jobs expected to be created.

Aside from increasing production capacity, the new factory would enhance the company’s business prospects by enhancing its ability to tender for WHO sponsored programmes, which Nigerian pharmaceutical manufacturers are unable to access, losing out to foreign companies in these tenders.

Despite the fall, the management of Fidson Healthcare Plc has reassured that the healthcare company remains on the path to attaining significant growth in the near future as its focus on its strategies for market expansion, brand building and opportunities that exist through local and international partnerships would lead to better returns for shareholders.

Fidson stated that its cost optimisation strategy, which it embarked on a couple of years ago, continued in 2016 in line with the strategy to drive efficiency in the face of a challenging business environment.

The management noted that the strategy saw Fidson reducing its operating cost by over 60 per cent in the period under review, assuring that the company will continue to drive efficiency into its processes, which will continue to result in savings on administration expenses.