Bioprist gives to virus fight, aims to mobilise donations - Pharma sales climb, but expenses constrain profit
BIOPRIST GROUP, the Montego Bay-based holding company for Indies Pharma, Bioprist Pharmaceuticals and Bioprist Knowledge Park Limited, has donated what its principal says is an initial $1 million to Jamaica’s COVID-19 relief fund.
In making the donation on March 20, Group President and CEO Dr Guna Muppuri said that he would be leading an effort to mobilise additional financial contributions from persons and companies in the medical and pharmaceutical sectors towards saving lives, as the Government leads the effort to prevent the spread of the COVID-19 coronavirus.
The businessman says the donation is part of giving back to the society as his companies continue to do well, pointing to the performance of Indies Pharma, the only one of his company that trades publicly on the Jamaica Stock Exchange.
Muppuri is generally talking up the public firm’s financial outlook, even in the face of strong economic headwinds that threaten to blow the world economy into recession and the Jamaican business landscape into serious contraction.
“It is my intention to approach every pharmaceutical company, select corporate Jamaica, the medical fraternity, Indian diaspora, friends and family in our country to raise funds towards your noble initiative, safeguarding our nation,” Muppuri, a medical doctor and dual Indian and Jamaican national, said in a letter to Prime Minister Andrew Holness.
He told the Financial Gleaner that he and his wife, Indies Pharma’s Chief Operating Officer, Vishnu Muppuri, particularly want to ensure that the Government is able to procure sufficient protective gear for the nation’s front-line health workers.
The cash donation comes a week behind Indies Pharma’s filing of its first-quarter financials for the period ending January 2020 showing a 23 per cent increase in assets, a 15 per cent rise in sales revenue, and a 10 per cent improvement in gross profit over the corresponding period of 2019.
The company’s bottom line moved in the opposite direction, however, contracting 19 per cent in the comparative period. Still, Muppuri notes that the near $40-million net profit made in the January quarter was a 78 per cent recovery relative to the October 2019 period, when net profit amounted to $22 million.
“January 2020 performance is an indication of bouncing back to our growth mode, despite certain growth-related recurrent and new expenses burdening our bottom-line revenues,” Muppuri commented on the results.
He adds that for the month of January alone, profit improved by 11.9 per cent, despite additional expenses.
The growth-related expenses included rental of additional space, increased marketing costs, and hiring new staff. The company has also continued to spend on building a new operating headquarters and warehousing space in Montego Bay.
Indies Pharma grew sales from $168 million to nearly $194 million, but profit dipped from $47 million to $39.6 million.
The company’s administrative and other expenses increased by nearly $20 million to $91.8 million, which the earnings report said was mainly due to costs related to increases in business activity.
“Significant increases were incurred for rent, lease and set-up costs for the new facility in Freeport, Montego Bay,” the company reported to shareholders.
First-quarter liabilities increased by 397 per cent, or $153.7 million, mainly as a result of accounting changes related to a longer booking period for lease- payment obligations. There was also an increase in trade payables at the Pharma company.
Muppuri says, overall, the numbers indicate stable growth which was able to absorb the growth-related expenses and still register healthy net profit.
Cost of goods, he notes, remains at 34 per cent, within the company’s target range of 30 per cent to 35 per cent.
“Going by all indications, despite the increase in the expenses, we are looking forward to 33 per cent year-on-year growth in net profits, and this is all from the organic growth of the company, without having to factor in the new segments that are destined to join the company’s new list of offerings from the third quarter of the fiscal year,” according to the company’s CEO.