MDS reports 16% decline in first quarter net profit

Date: August 7, 2019

Medical Disposables & Supplies Limited (MDS) for the three months ended June 30, 2019, reported revenue of $557.23 million, an increase of 3% compared to the $541.11 million booked in 2018. This according to Management, “reflected modest in sales. This performance was attributed mainly to price adjustments, given a dip in unit sales across our consumer product lines.”

Cost of Sales decreased $8.12 million to total $416.06 million relative to $424.17 million in 2018, a 2% decrease. As a result, Gross Profit grew by 21% or $24.24 million to total $141.18 million compared to $116.94 million in 2018.

Total Operating Cost rose 20% to close at $102.45 million (2018: $85.61 million). Of this total, Selling and Promotional costs rose 43% to $46.17 million relative to $32.25 million in 2018. Administrative Expenses went up by 5% to close the three months period at $51.16 million (2018: $48.90 million). MDS recorded Other Operating income of $606,708 for the first quarter of 2019 relative to an income of $284,831 for the comparable period of 2018. Depreciation increased by 17% to close the quarter at $7.14 million (2018: $6.11 million).  Management noted that,  the movement  in expenses was “due mainly to costs associated with increased business activities, marketing research and promotional activities aimed at the consumer division in particular, and infrastructure needed to be in place to improve the sales growth overall.”

As a result, Operating Profit closed the first quarter at $38.73 million relative to $31.33 million in 2018, this represents a 24% increase. MDS reported Loss on Foreign Exchange of $9.40 million versus a loss of $4.20 million twelve months earlier. This according to MDS was due mainly to, “the devaluation of the Jamaican Dollar in relation to the United States currency.”

Finance Cost for the three months amounted to $10.77 million relative to the $8.04 million reported in 2018, a 34% increase year over year.

Pre-tax profit totalled $18.57 million, down from the $19.10 million booked for the corresponding quarter of 2018, a 3% decline.  Net Profit for the quarter amounted to $16.09 million after taxation of $2.48 million (2018: nil) relative to a net profit of $19.10 million booked for the first three months of 2018.

Earnings per share for the first quarter amounted $0.06 (2018: $0.07). The trailing earnings per share amounted to $0.42. The number of shares used in the calculation was 263,157,895. MDS stock price closed the trading period on August 05, 2019 at $8.80.

Balance Sheet at a glance:

As at June 30, 2019, Total Assets rose by 21% amounting to $1.65 billion (2018: $1.37 billion). This was due to an increases in the company’s ‘Prepayments’ and ‘Inventories’ which ended the period at $157.73 million (2018: $72.39 million) and $582.14 million (2018: $420.55 million), respectively. ‘Property, Plant & Equipment’ also contributed to the growth closing at $561.19 million (2018: $523.72 million). The company noted, “ the company’s inventories and other receivable and prepayment balances increased as a direct result of the expectations of added business opportunities.”

Shareholders’ equity totalled $775.30 million (2018: $692.23 million), resulting in a book value per share of $2.95 (2018: $2.63).

 

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2019-08-07T16:44:20-05:00