Cipla Quality Chemicals announces dividend payment of Shs2 per share

Cipla Quality Chemical Industries has announced a dividend payment of Shs2 per share after reporting better performance for the period ended March 31, 2022.

The company posted a net profit of Shs24bn compared to a loss of Shs10bn in 2020.

“Based on our performance, the Board has agreed to recommend a dividend of Ushs. 2 per share to shareholders for approval. This is the 1st time since listing that the Company shall be paying dividends,” Emmanuel Katongole, the board chairman, announced on Thursday, August 18, 2022.

“The Board is confident that with better performance, the Company will continually pay dividends and provide returns to its shareholders. I look forward to seeing what our Company accomplishes by continuing to live our purpose “caring for life,” he added,

Katongole said even at the heart of the Covid-19 pandemic, the plant continued to operate optimally.

“I express my gratitude to my colleagues on the Board for their diligence, leadership and guidance. The future is bright if we remain rooted in our collective purpose.” Mr Katongole said.

Mr. Frederick Kakooza, CFO-CiplaQCIL, said the company returned a profit after tax for the first time since 2020.

“Sales for FY 2021-22 were UShs 267.4 billion compared to UShs 284.5 billion in FY 2020-21. The reduction in sales was explained by the nonrecurrence of COVID-19 sale opportunities in the export segment after the pandemic came under control. In the previous year, medical supply chains for some countries were disrupted, and were unable to get treatments from their usual sources,” he said.

“Uganda and particularly your company supplied those countries with the needed life-saving medicines during the pandemic. These orders never recurred when the pandemic came under control reducing the sales in the export sector by 37% compared to export sales in the previous year,” he added.

Mr Kakooza revealed that excluding the impact of one-off COVID-19 sale opportunities, overall annual sales grew by 3% compared to FY 2020-21. Local sales increased by 19% mainly due to additional orders received from Government of Uganda and the Global Fund, he said.

“The benefit was increased by the full year impact of entry into the private market distribution segment compared to four months in FY 2020-21. This segment continued to grow with the increase in the product range, favourable pricing, superior quality, and focused distribution,” Mr Kakooza said.

EBITDA closed at UShs 48 billion compared to an almost neutral position in the previous year. The ratio of EBITDA to revenue rose from 0% to 18% this year. The Improvement was mainly explained by Improvement in gross margins, Recovery of part of the Zambia debt and Stringent cost control.

He said gross profit margin increased to 27% compared to 19% in the previous year partly due to the change in customer and product mix. ACTs proportion in the mix was 21% to 25% in FY 2020-21 while that of the private market distribution segment increased from 1% to 3%. During the year, Zambia paid UShs 19.3 billion reducing the unpaid balance to UShs 23.2 billion from UShs 42.9 billion. The Zambia government continues to acknowledge the unpaid balance.

Excluding the impact of Zambia, collection EBITDA would have closed at UShs 29 billion compared to UShs 10 billion representing a healthy EBITDA margin improvement of 7% from 4% in the previous year to 11% in the current year.” Mr. Frederick Kakooza, CFO-CiplaQCIL.

Ajay Kumar Pal, the CEO, CiplaQCIL, said: “A good portfolio is an important driver for future growth of your company and the process to produce new product locally is both longer and complex, we are happy to report that we have locally manufactured three new products in last year of which two are for therapy areas outside HIV/Malaria and Hep B. Our all financial metrics have shown greater improvement and registered a significant progress from previous year.”