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Drug maker Adcock Ingram has reported a double-digit increase in full-year earnings and dividends even as the seller of brands such as Corenza C and Panado navigated a weak economy that saw consumers coming under increasing pressure.
The company, valued at about R9 billion on the JSE and which is controlled by industrial conglomerate Bidvest, reported on Wednesday that its headline earnings per share for the year to end June 2023 had increased 12% to 561.3c, while its total dividend increased 17% to 250c per share. The company's revenue came in 5% higher at about R9.1 billion, while it managed to raise its trading profit 6% to about R1.2 billion, helped by increased price-regulated drug prices.
It described its results as a "healthy financial and operational performance" amid a weak economy characterised by currency weakness and volatility. It also noted that SA's cash-strapped consumers had also been constrained during the period.
Adcock Ingram imports inventory and equipment from foreign suppliers, so the fallout from rand weakness is keenly felt by the company.
The company, however, welcomed the recent 1.73% "top-up" of the price increase threshold for products regulated by pricing controls, saying this would help mitigate margin pressures on the affected products it sold.
The top-up followed the 3.28% increase granted by the state in January, which Adcock earlier this year flagged was not adequate to help local pharmaceutical manufacturers keep up with increasing imported ingredient costs. At the time, the group said if companies were not able to pass on reasonable increases, it could potentially devastate local factories.
Adcock also said it remained on the lookout for new brands to add to its product portfolio through potential "acquisitions and partnerships".
