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The company manufactures antiretrovirals, artemisinin-based combination therapies (ACTs) and Hepatitis medicines to treat HIV/AIDS, malaria and Hepatitis
| THE INDEPENDENT | Cipla Qaulity Chemicals Ltd, the East African nation’s drug manufacturer, has said net profits surged nearly five times to Shs 13.9 billion for the six months ending September driven by recovery of part of its debt from the government of Zambia.
Listed on the Uganda Securities Exchange, Cipla has been demanding the southern Africa country nearly Shs 40.4bn in arrears for the drugs supplied in 2018. The Zambian debt has since reduced to Shs 12.2 billion.
“Excluding the impact of Zambian Government collection, profit for the period would have been Shs 7.1 billion (H1 FY22: Shs 1.5 billion) representing a growth of 373.3%,” the company said in a statement, adding that efforts to collect the remaining balance are in advanced stages.
Cipla’s revenue declined slightly by 3.4% to Shs 120billion but local sales improved during the period.
Cipla’s executives said the firm’s gross profit margin increased from 23.3% to 30.4% during the period under review mainly due to reduced cost of production.
“The benefit of successful raw material price negotiations together
with improved factory efficiencies in the previous periods contributed to the gross profit margin improvement,” the company said.
“The improvement was further boosted by a change in product mix and customer mix. The proportion of local orders in total revenue increased to 78.3% compared to 64.7% in the previous period.”
Cipla paid its shareholders dividend for the first time this year since it was listed on the Uganda Securities Exchange four years ago.
The company posted Shs 24billion net profit for the year ended March 2022 compared to Shs 11billion in the previous year.
Cipla announced plans last year to widen its product portfolio as part of its new strategy to improve its fortunes in the medium term. These include implementing various cost-efficient initiatives such as replacing expensive short-term capital expenditure with a long-term loan to manage interest and save costs.
Cipla’s CEO Ajay Kumar said then that the immediate priority of the business is to make it profitable in line with the focus on sustainable and profitable growth to achieve its short- and long-term goals.
“Another key aim is to improve business agility and we will strongly focus on ensuring a solid governance framework,” he said.
“We will expand our portfolio and invest in new therapeutic areas such as oncology and continue to focus on efficiencies in business.”
Cipla, one of the largest pharmaceutical manufacturers in the Sub-Saharan Africa (SSA), manufactures antiretrovirals, artemisinin-based combination therapies (ACTs) and Hepatitis medicines to treat HIV/AIDS, malaria and Hepatitis.
The company has secured a number of product registrations in West Africa (WAHO), Southern Africa (ZAZIBONA) as well as increased the regulatory footprint from 16 to 31 countries across Africa.
The drug manufacturer also exports drugs to countries such as Nigeria, Sierra Leone, Niger, Botswana and Malawi as well as delivered on its long-standing commitment to enter the Ugandan retail pharmaceutical market by acquiring the importation and distribution business of the Cipla range of products manufactured in India.
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