MDS reports 3% increase in year end net profits

Date: May 31, 2019

Revenue amounted to $2.22 billion, an increase of 9% relative to $2.05 billion booked the previous year. For the quarter, revenues totalled $641.26 million, up 15% year over year (2018: $559.46 million). The Company stated that, “this was mainly attributable to an increase in product offerings, price increases and growth in the medical business segment.”

Cost of sales went up 6% to close the period at $1.67 billion relative to the $1.58 billion reported for the same period last year. This resulted in gross profit of $548.51 million, a 19% increase compared to $461.52 million reported last year. Gross profit for the quarter amounted to $182.43 million (2018: $131.84 million).

Total operating costs closed the period at $367.35 million, up 13% (2018: $324.10 million). Of this:

Administrative expenses amounted to $194.82 million (2018: $171.09 million).

Selling and promotional costs totalled $145.10 million (2018: $127.85 million).

Depreciation cost closed the period at $25.38 million (2018: $23.05 million).

Other operating expenses totalled $2.05 million (2018: $2.12 million).

MDS indicated that, “the increase in operating expenses was due mainly to the costs associated with our sales growth. These operational expenses include: salaries, commissions and related expenses, general insurance expense, delivery expenses, information technology consultancy fees, security expenses and utility expenses.”

The Company’s loss on foreign exchange was reported at $23.26 million compared to gain of $2.65 million in 2018. Management noted that, “this was due to cost calculated on the cost of goods purchased due to the devaluation of the Jamaican Dollars to the United States currency.” Finance costs increased by 18% to total $41.55 million (2018: $35.31 million). Gain on disposal of property, plant and equipment for the period amounted to $1.51 million (2018: $484,580).

As a result, MDS reported profit before tax of $123.35 million, a 12% increase relative to the $109.65 million in 2018. For the quarter, profit before tax closed at $68.69 million (2018: $46.13 million).

Consequently, net profit for the period amounted to $112.76 million  relative to $109.59 million in 2018, a 3% increase after a tax charge of $10.58 million (2018: $60,000) for the period. Net profit for the quarter amounted to $58.13 million (2018: $46.13 million).

Earnings per share for the period amounted to $0.43 (2018: $0.42). EPS for the quarter closed at $0.22 relative to $0.18 in 2018. The number of shares used in the calculations is 263,157,895. MDS last traded on May 30, 2019 at $5.50.

Balance Sheet at a glance:

As at March 2019, ‘Total Assets’ amounted to $1.65 billion, 14% more than $1.45 billion reported in the prior year. ‘Inventories’ and ‘Property, Plant and Equipment’ contributed to the overall increase closing the period at $647.96 million (2018: $543.78 million) and $557.72 million (2018: $510.24 million), respectively. Also, ‘Trade and Other Receivables’ contributed to the growth amounting to $390.21 million (2018: $356.23 million).

Shareholders’ Equity totalled $759.21 million (2018: $673.13 million) resulting in a book value per share of $2.89 (2018: $2.56).


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