Cipla Quality Chemicals has said current growth trends point to a likelihood of a return to profitability in the next two years.
Responding to a shareholders concern regarding the lack of dividends payout since the company listed on Uganda Securities Exchange in 2018 during the third annual general meeting in Kampala, Mr Ajay Kumar Pal, the Cipla incoming chief executive officer, said they had expanded Cipla’s sales both in the local and export market, which should be able to deliver the company to profitable in the shortest time possible.
“We are very hopeful by 2022 we shall be profitable and begin paying dividends to our shareholders,” he said, noting the company’s economics were improving with a likelihood of a return to profitability by 2022 or 2023.
Cipla, which listed on the USE on September 18, 2018 after an oversubscribed initial public offering, raised Shs166.5b but has since maintained a loss-making streak with a mixture of varied improvements in revenue, boosted by an aggressive export strategy.
Cipla has, according to Mr Anita Kwikiriza of UAP Brokers, seen its stock price fall to Shs95, which represents a decline in value of about 63 per cent since 2018.
However, during the period ended June, according to Mr Frederick Kakooza, the Cipla chief finance officer, the company registered improved performance with revenues growing to Shs284b from Shs193b for the period ended June 2020, which represented a 47 per cent growth.
The growth, he said, was largely driven by an increase in exports, which grew from Shs25b in June 2020 to Shs127b due to an aggressive expansion in new markets increasing the company’s reach to 31 countries.
During the period, total debt reduced from Shs23b in June 2020 to Shs11b.
During the period, Cipla generated 48 per cent of its revenue from products sold to government while 12 per cent came from Global Fund. Sovereign customers contributed 8 per cent, while the Presidential Malaria Initiative and private market contributed 19 per cent and 7 per cent, respectively.
Mr Emmanuel Katongole, the Cipla chairman, said whereas Covid-19 had presented a number of disruptions, the company had implemented a diversified strategy that will seek to boost sales by expanding product breadth while tapping into new opportunities.