MDS reports 10% increase in six months net profit

Date: November 13, 2018

Medical Disposables & Supplies Limited, for the six months ended September 2018 reported Revenue amounting  $1.04 billion, an increase of 8%, relative to $964.89 million booked the previous year. For the second quarter revenues totalled $500.85 million up 3% year over year (2017: $484.30 million). MDS noted, “This positive performance was driven by increased sales in all divisions of the business operations showing very encouraging results.”

Cost of sales went up 6% to close the period at $800.44 million relative to the $756.41 million reported for the same period last year. This resulted in gross profit which increased 16% or $33.05 million to a total of $241.52 million relative to the $208.47 million for the corresponding period in 2017. Gross profit for the second quarter amounted to $124.59 million, an 18% improvement compared to the $105.97 million reported in 2017.

Total operating cost closed the period at $169.24 million, up 4% (2017: $162.85 million). Of this, selling and promotional costs declined 2% to $64.79 million (2017: $66.41 million). In addition, administrative expenses increased by 12% to $96.76 million from $86.70 million last year. Notably, the company booked other operating income of $1.85 million for the period ended September 30, 2018 relative an expense of $92,105 of the same period in 2017. The company highlighted that this was to “Sustain the current growth, development and continued expansion of the business, the company increased its investment in human capital including improvement to its existing infrastructure.” Depreciation for the first six month amounted to $12.23 million, 4% more than the $11.81 million reported in 2017.

The company’s loss on foreign exchange was reported at $20.11 million compared a gain of $2.72 million in 2017 which according to management was, “calculated on the cost of goods purchased due to the devaluation of the Jamaican Dollars to the United States currency.” Finance cost increased by 4% to total $17.37 million. (2017: $16.73 million) .

As a result, MDS reported profit before tax of $34.80 million, a 10% increase relative to the $31.63 million in 2017.

Consequently, net profit for the period amounted to $34.77 million relative to $31.57 million in 2017, a 10% improvement year over year, after a tax charge of $30,000 for the period. Net profit for the quarter amounted to $15.68 million (2017: $15.91 million).

Earnings per share for the period amounted $0.13 (2017: $0.12). EPS for the quarter amounted to $0.06 relative to $0.06 in 2017. The trailing twelve-month EPS amounted to $0.429. The number of shares used in the calculations is 263,157,895. MDS last traded on November 12, 2018 at $ 8.00.

Also, MDS mentioned, “Despite a challenging economic environment, the Company has experienced growth as forecasted in its corporate strategic plan. The Company is engaged in discussions with its suppliers to increase its product line offerings. MDS is committed to maintaining high standards in efficient product movement and market penetration, while strengthening relationships with our customers, suppliers, employees and other stakeholders.”

Balance Sheet at a glance:

As at September 2018, total assets amounted to $1.54 billion 8% more than $1.42 billion the year prior. MDS further added that “due to increases in property, plant and equipment as well as the inventories and receivable. This increase was due mainly to the overall increase in sales revenue.

Shareholders’ Equity totalled $680.53 million (2017: $595.11 million) resulting in a book value per share of $2.59 (2017: $2.26).

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