Abu Dhabi-listed Julphar’s net profit falls despite 91% rise in sales

Gulf Pharmaceutical Industries (Julphar), one of the region’s largest drug makers, posted lower net profit in the second quarter of this year, despite sales nearly doubling.

Net profit for the period amounted to AED 5.2 million compared to AED 73.4 million in the same period last year. After years of losses, the drugmaker recently turned a profit, with a net profit of AED65 million in 2021.

The Abu Dhabi-listed company said in a statement on Friday that geoeconomic headwinds impacted year-to-date and quarterly sales in certain markets including Algeria, Ethiopia and Morocco. Its newly acquired distribution business, Plant Pharmacies, also had lower margins.

However, Juphar noted that operations and productivity in the affected markets “stayed in line” with organic growth in segment operations up 10%.

Overall, results remained “strong”, with net sales reaching AED419.9 million in the second quarter, up 91% year-on-year.

EBITDA from continuing operations reached AED44.2 million, marking a return to a double-digit margin of 10.5% on net sales. The gross profit margin during the period was 34%.

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“The company’s operating results showed strong and continued positive trends, while overcoming geopolitical challenges, as evidenced by the growth in net sales,” the drugmaker said in a separate analysis. The company said the group’s gross profit margin was impacted by lower gross profit margins from Planet’s distribution business.

The financial results of Planet, the regional pharmaceutical distributor acquired by the company last year, will be fully consolidated into Jufa Group from July 2021.

According to the chairman of the board, Sheikh Saqer Bin Humaid Al Qasimi, the company successfully completed its turnaround plan in the first quarter of 2022, resulting in a “strong” performance.

“Looking ahead to the second half of the year, Julphar is in a strong position and well positioned to deliver sustainable growth in line with its 2030 strategic goals,” he said.

(Reporting by Cleofe Maceda; Editing by Daniel Luiz)

cleofe.maceda@lseg.com