Subject: Neimeth Delivers Strong Revenue Growth and Operational Turnaround Despite Persistent Bottom-Line Pressure
Neimeth International Pharmaceuticals Plc has reported a remarkable 103% year-on-year revenue growth, signaling a strong rebound in commercial performance during the 2024 financial year. Revenue surged from N2.21 billion in 2023 to N4.49 billion, driven by higher sales volumes and deeper market penetration, according to Chairman Christopher Oshiafi at the company’s 66th Annual General Meeting in Lagos.
Despite macroeconomic headwinds, including rising costs and forex volatility, gross profit rose by 167%, climbing from N734.07 million to N1.96 billion. This substantial margin improvement highlights a significant step forward in Neimeth’s operational efficiency.
A standout development in 2024 was the company’s return to positive operating profit, rebounding from an operating loss of N1.02 billion in 2023 to an operating gain of N18.89 million, reflecting effective execution of cost-control initiatives. Notably:
- Marketing and distribution expenses fell 14%, from N792.38 million to N628.18 million.
- Administrative expenses dropped 28%, also down to N628.18 million, showcasing disciplined overhead management.
However, profitability remains constrained by rising financial costs. Finance charges increased by 32% to N873.32 million, while foreign exchange losses worsened by 41%, rising to N2.05 billion, further eroding earnings.
As a result, Neimeth still posted a loss before tax of N854.43 million and a loss after tax of N885.33 million. Yet, this represents a significant improvement compared to losses of N1.69 billion and N1.80 billion, respectively, in the prior year.
While the bottom line remains in negative territory, the marked improvements in sales, gross margin, and operating efficiency reflect a clear turnaround trajectory. Shareholders at the AGM expressed confidence in management’s strategy, viewing the results as a positive inflection point in Neimeth’s path to sustainable profitability.
If current momentum continues and foreign exchange pressures subside, Neimeth appears well-positioned to transition into net profitability in the near term, backed by its strengthened market presence and leaner cost structure.
Disclaimer
The user WaneInvestmentHouse holds no position in NGSE:NEIMETH. Simply Wall St has no position in any of the companies mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The author of this narrative is not affiliated with, nor authorised by Simply Wall St as a sub-authorised representative. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimates are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.