Business

Cipla records 74% dip in 1H profit amidst transition to new ownership


Kampala, Uganda | THE INDEPENDENT | Cipla Quality Chemicals Limited has reported a substantial 74% dip in profit after tax to Shs 3.56 billion for the six months ending September 30. The dip is attributed to a significant increase in operating expenses and a shift in the product mix.

The company’s operating profits also saw a notable decline, reporting Shs 5.82 billion, down by 69.22% from Shs 18.9 billion. The gross profit margins also witnessed a decrease from 30.41% in the past six months to 25.53% during the period under review.

Return on assets and return on equity experienced decreases, standing at 1.63% and 2.15%, respectively, in comparison to 6.30% and 8.33% in the same period last year.

Despite these profit challenges, Cipla exhibited a 1% growth in revenue compared to the same period last year. Strong momentum was observed in various customer segments, with orders from sovereign customers and institutional bodies growing by 19% (Shs 19.9 billion) and 32% (Shs 5.7 billion), respectively.

However, the contract manufacturing segment declined by Shs 19.9 billion or 80%, primarily due to reduced demand from Cipla Ltd.

This development comes as the pharmaceutical company transitions into new ownership. Last month, the Common Market for Eastern and Southern Africa (Comesa) Competition Commission approved the transfer of the majority shares in the company from Cipla India Ltd to Africa Capital Works SSA, a subsidiary of Capital Works Ltd, a US-based private equity firm.

Africa Capital Works SSA 3 acquired 51.18% shares, while SCB Mauritius a/c Capital Works SSA 1 acquired 11.15% shares, effective from November 14, 2023. The official name will revert to Quality Chemicals Ltd following the change in ownership.

As one of the largest pharmaceutical manufacturers in Sub-Saharan Africa, Cipla is recognized for producing antiretrovirals, artemisinin-based combination therapies, and Hepatitis medicines.

Cipla has also ventured into the Ugandan retail pharmaceutical market by acquiring the importation and distribution business of the Cipla range of products manufactured in India.

The company’s commitment extends to multiple African countries, securing product registrations, increasing regulatory footprints, and actively exporting drugs to nations like Nigeria, Sierra Leone, Niger, Botswana, and Malawi.

The post Cipla records 74% dip in 1H profit amidst transition to new ownership appeared first on The Independent Uganda:.



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