NEIMETH INTERNATIONAL GIVES BONUS BUT....

Neimeth  International Pharmaceutical PLC has announced its intention to pay bonus of one new share for every 10 held but it is while there is still accumulated loss in the books.

According to the report for the financial year to September released this week, it was a good year for NEIMETH but not good enough to declare dividends. So, the board of directors resolved to issue the bonus to shareholders in the books by December 31.

But a close look at the closing balance sheet for the year showed that in spite of the N95.4m profit made compared to 2015's N315.8m loss, accumulated loss still stood at N760.3m.

However, it was possible to issue the bonus because there was also share premium balance of N1197.9m standing for years now.

Actually, but for the N196.6m net loss from foreign exchange transactions compared to only N16.8m loss in 2015,  it would have been quite a year of recovery for Neimeth. There was sharp 80.9% drop in income from other sources to NN6.16m but the 37% increase in core business income to N2001.8m took good care of that.

Then visibly very effective cost control led to only 0.09% increase in cost of sale to N776.8m; 12.1% decrease in administration costs to N527.4m and only 7.9% rise in marketing and distribution expenses to N322.3m.

The cost of sale slow growth was driven by drops in factory wage bill, power and fuel, and significant decrease in provision for asset usage (depreciation).

Also very helpful was the 2.71% decline in finance charges to N89.6m.

In the end, that Neimeth ended with only N95.4m profit before tax was principally because of the leap in exchange loss.

NEIMETH INTERNATIONAL PHARMACEUTICALS PLC:
                Nm, Full year.
                     2016.          2015
Total income 2008.0.  1493.0
Core income 2001.8.   1460.7
Cost of sale.    776.8.     776.1
Other income   6.16       32.3
Distribution   322.3.      298.7
Admin.            527.4.      600.6
Net forex       (196.6).   (16.8)
Finance cost    89.6.      92.1
Profit b4 tax    95.4.    (315.8)
Margin %.        4.75.    (21.2)

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