A Quality Chemicals tent selling medicines Drug maker, Cipla Quality Chemicals Industries Limited, has issued a profit warning, informing shareholders and people who intend to buy its shares that it recorded a loss between April and September, 2019.
The loss, the company said, was brought on by low sales of medicines in that period and increased pressure from competitors, which has reduced its profit margins.
Also, the company said that it was unable to collect some debts, resulting into an increase in credit loss and interest. This is the second time in a row that Cipla is announcing disappointing results after listing on the Uganda Securities Exchange in September 2018.
In March, the company announced an 85% fall in profits for a year from March 2018 to March 2019, dropping from Shs 44.6 billion to Shs 6.8 billion respectively. People who bought shares in the company are yet to earn a dividend – little wonder there is no appetite for the company’s stock and more people want to sell.
The share price fell from the initial public offering price of Shs 265 a share to Shs 128 on Tuesday morning. In March 2019, the company tried to calm fears of shareholders about the company’s dismal performance, saying it “had secured the first-ever tender award by the USA President’s Malaria Initiative (PMI) for WHO prequalified antimalarial to an African-based manufacturer”.
“That is one example of how we are constantly in search of alternative revenue streams and product opportunities to future proof our business,” the company said. It all looks like things haven’t worked in its favor. Investors will have to wait longer before they can earn anything.
The company which was established in 2005 manufactures anti-retroviral (ARV), artemisinin-based combination therapies (ACTs) and medicines to treat HIV/Aids, malaria and hepatitis. The company is majority owned by India’s third-largest drug maker Cipla.