February 14, 2022
Medical Disposables & Supplies Limited, for the nine months ended December 31, 2021 reported Revenue amounting $2.49 billion, an increase of 41%, relative to $1.77 billion booked the previous year. For the third quarter revenues totaled $874.63 million up 40% year over year (2020: $626.08 million). MDS noted, “This increase in sales reflects an increase in overall business activity coupled with the consolidation of the operations of the recently acquired subsidiary, Cornwall Enterprises Limited. Consumer demand for pharmaceutical and medical disposable items has seen a significant improvement over the prior period.”
Cost of sales rose 39% to close the period at $1.85 billion relative to the $1.33 billion reported for the same period last year. This resulted in gross profit climbing 49% to a total of $644.53 million relative to the $432.54 million for the corresponding period in 2020. Gross profit for the third quarter amounted to $234.04 million, a 38% improvement compared to the $169.12 million reported in 2020.
Total operating cost closed the period at $485.46 million, up 38% (2020: $352.43 million). Of this, selling and promotional costs went up 14% to $181.99 million (2020: $159.65 million). In addition, administrative expenses increased by 60% to $278.55 million from $174.42 million documented in the same period last year. Notably, the Company booked other operating income of $6.31 million for the period ended December 31, 2021, relative an income of $3.88 million of the same period in 2020. Depreciation for the nine months amounted to $29.09 million, 37% more than the $21.25 million reported in 2020.
As such, operating profit amounted to $159.07 million (2020: $80.11 million). For the quarter, operating profit closed at $58.64 million versus $43.47 million booked in the prior corresponding quarter.
The Company’s loss on finance cost was reported at $60.21 million compared a loss of $63.89 million in 2020. Loss on foreign exchange rose by 341% to total $11.83 million (2020: $2.69 million).
As a result, MDS reported profit before tax of $91.99 million, a 555% increase relative to the $14.05 million in 2020. For the quarter, profit before tax closed at $37.33 million (2020: $27.16 million).
Consequently, net profit for the period amounted to $75.90 million relative to $12.29 million in 2020, a 517% increase year over year, after a tax charge of $16.09 million (2020: $1.76 million). Net profit for the quarter amounted to $28.97 million (2020: $25.40 million).
Earnings per share for the period amounted $0.29 (2020: $0.05). EPS for the quarter amounted to $0.11 relative to $0.10 in 2020. The trailing twelve-month EPS amounted to $0.51. The number of shares used in the calculations is 263,157,895. MDS last traded on February 14, 2022, at $7.40 with a corresponding P/E ratio of 14.62 times.
Balance Sheet Highlights:
As at December 31, 2021, total assets amounted to $2.82 billion 35% more than the $2.09 billion reported the prior year. This was primarily due to a 27% increase in ‘Inventories’ and a 40% increase in ‘Property, plant and equipment’ which amounted to $1.17 billion (2020: $924.19 million) and $833.03 million (2020: $595.19 million), respectively. MDS noted, “A significant amount of this increase was due to the acquisition of a 60% stake in subsidiary company, Cornwall Enterprises Limited (CEL). The acquisition added non-current assets of just over $250M. The Group expanded Inventories on hand during the current period by $245.8M when compared to prior year to respond to the market demand as well as offset any delays from the shipping and logistics challenges experienced globally.”
Shareholders’ Equity totalled $952.24 million (2020: $846.05 million) resulting in a book value per share of $3.62 (2020: $3.21).
Disclaimer:
Analyst Certification -The views expressed in this research report accurately reflect the personal views of Mayberry Investments Limited Research Department about those issuer (s) or securities as at the date of this report. Each research analyst (s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation (s) or view (s) expressed by that research analyst in this research report.
Company Disclosure -The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may effect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein
