Executive Summary
Neimeth International Pharmaceuticals Plc (“Neimeth” or “the Company”) reported moderate growth in revenue and profitability for the nine months ended September 30, 2025. Total revenue for the period increased 62% YoY to ₦5.01 billion, driven primarily by improved sales volumes and better market penetration.
Despite this top-line growth, net profit for 9M 2025 rose modestly to ₦340 million, representing a 9% YoY increase, reflecting higher finance costs and operating expenses. Basic EPS increased slightly from 7.27 kobo in 9M 2024 to 7.95 kobo, signaling steady, albeit slow, shareholder value creation.
The balance sheet remains conservative with total assets of ₦13.35 billion, largely funded by a combination of equity and borrowings. Current liabilities are significant at ₦10.86 billion, reflecting short-term borrowings and trade payables.
Financial Highlights – Statement of Profit or Loss
₦’ million 9M 2025 9M 2024 % Δ
Revenue 5,009 3,094 +62%
Cost of Sales (2,523) (1,642) +54%
Gross Profit 2,486 1,452 +71%
Other Income 312 135 +132%
Marketing & Distribution (437) (413) +6%
Administrative Expenses (701) (420) +67%
Operating Profit 1,660 753 +120%
Finance Costs (1,320) (443) +198%
Profit Before Tax 340 310 +9%
Profit After Tax 340 310 +9%
Basic EPS (kobo) 7.95 7.27 +9%
Revenue and Profitability Analysis
- Revenue growth was strong at 62% YoY, driven by increased product sales.
- Gross margin improved slightly to 50% from 47% in 9M 2024, reflecting better production efficiency.
- Operating profit growth (120%) outpaced net profit growth (9%), largely due to a sharp rise in finance costs (up 198% YoY), which significantly diluted bottom-line performance.
- No income tax expense was reported, consistent with previous periods, preserving net profitability.
Balance Sheet Overview
₦’ million 30-Sep-25 31-Dec-24 % Δ
Total Assets 13,346 11,987 +11%
Non-current Assets 6,191 6,253 -1%
Current Assets 7,155 5,735 +25%
Total Liabilities 11,354 10,336 +10%
Equity 1,992 1,652 +21%
Interpretation
- Current liabilities make up the bulk of total liabilities, dominated by short-term borrowings (₦4.76 billion) and trade payables (₦5.51 billion), highlighting liquidity risk if operational cash flow does not match repayment obligations.
- Total equity improved slightly to ₦1.99 billion, reflecting retained earnings accumulation and partially offsetting accumulated losses.
- Cash balances remained stable at ₦2.16 billion, adequate for working capital needs.
Key Ratios & Metrics
Metric 9M 2025 9M 2024
Gross Margin 50% 47%
Operating Margin 33% 24%
Net Margin 7% 10%
Current Ratio 0.66x 0.58x
Debt-to-Equity 5.70x 6.26x
EPS Growth 9% 7%
Strategic Insights
- Neimeth achieved top-line growth through stronger sales, but net profitability remains constrained by high finance costs from borrowings.
- Operational efficiency has improved, evidenced by a higher operating margin of 33%.
- The liquidity position is tight, with current assets covering only two-thirds of current liabilities, necessitating careful cash flow management.
- Focus on reducing debt servicing costs and optimizing working capital could significantly enhance net margins.
Strengths
- Solid revenue growth (62% YoY) and improved gross margins.
- Operating profit more than doubled, reflecting efficiency gains.
- Stable cash position supports short-term operational needs.
Weaknesses
- High finance costs eroded net profit growth to just 9% YoY.
- Liquidity coverage is weak (current ratio <1), increasing short-term financial risk.
- Accumulated losses remain significant despite equity improvement.
Outlook
Neimeth is positioned for moderate growth in the remainder of 2025, contingent on improved working capital management and debt refinancing to reduce interest burden. Continued investment in marketing and product distribution is expected to sustain revenue momentum. Strengthening operational efficiency and cost control will be crucial to translating top-line growth into improved net profitability.
Analyst View
“Neimeth demonstrates resilient revenue growth and operational efficiency. However, high financing costs and liquidity pressures limit net profit expansion. Strategic focus on debt reduction and cash flow management will be critical for sustainable earnings growth.”
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