Indies Pharma adds $1-billion loan from NCB at higher cost, but profit rises

Indies Pharma Jamaica Ltd earned higher profit for its latest quarter but replaced an earlier bond with a $1-billion issue at a higher interest rate.

It comes as the drug distributor rebounds from the impact of Hurricane Melissa. The refinancing resulted in higher finance costs during the quarter and increased its liabilities by one-third.

The original bond, raised in 2020, was meant to fund development of two US FDA drug applications, the company has said. The company describes the new bond as a renewal used to retire the old one.

Total liabilities increased 30.7 per cent to $1.3 billion, according to co-founder and Chief Operating Officer Vishnu Muppuri in a letter to shareholders. She added: “This increase is due to the renewed bond of $1.0 billion, which was used to retire bond of $805 million.”

Total liabilities now equate to three-quarters of its $1.75 billion in capital, up from over 60 per cent a year earlier.

The company retired a Sagicor bond at 7.0 per cent, and now carries a 9.5 per cent note from National Commercial Bank (NCB).

The effect shows

Revenue rose 12 per cent to $292.4 million for its third-quarter ending July, and net profit climbed 25 per cent to $38.5 million. “The company continues to recover from the disruption caused by the hurricane,” Muppuri wrote in the financials. “The profitability is still being pressured.”

Finance costs jumped 58.5 per cent to $15 million because of higher borrowing, which outpaced earnings growth. The new bond’s annual coupon comes to about $95 million, against roughly $56 million on the old one.

Net profit for the nine months fell 28.5 per cent to $120.5 million, and revenue was virtually flat at $857 million.

Total assets grew 13 per cent to $3.15 billion, which the company credited largely to a revaluation of a three-acre property earmarked for its headquarters in St James; an $83.8-million gain flowed through other comprehensive income.

Receivables nearly doubled to $334.2 million from $175.1 million, while cash stood at $418.3 million. Operating cash flow rose 5.6 per cent to $330.4 million. Indies paid $179.9 million in dividends. Bioprist Holdings Inc, tied to directors Guna and Vishnu Muppuri, owns 75.6 per cent of the company, which is listed on the Jamaica Stock Exchange’s Junior Market.

business@gleanerjm.com