Following years of losses, Julphar (or Gulf Pharmaceutical Industries), which has a market cap of Dh2.01 billion, has returned to profits thanks to more robust revenue growth from its core markets. The group posted a net profit of Dh65 million for 2021 against a net loss of Dh317 million the year ago. Julphar’s return to profitability, its first since 2017, came after revenue nearly doubled last year to Dh1.15 billion.
This figure is a massive improvement of 98 per cent year-on-year, fuelled by the return of shipments to core markets like Saudi Arabia, Oman, and Kuwait, as well as higher sales in North Africa. The EBITDA (earnings before interest, tax, depreciation and amortization) from continuing operations reached Dh169.2 million, as Julphar made proactive efforts to invest in its product pipeline and divest from non-profitable business units. The positive cashflow growth can also be attributed to continued market share gains in the UAE, Saudi Arabia, and several North African countries, and the complete consolidation of Planet Pharmacies’ financial results as of July 1, 2021.
Divesting non-core needs
Julphar acquired a 100 per cent stake in Dubai-based pharmaceuticals distribution company from the previous 40 per cent stake, which helped the group position itself competitively within the regional healthcare sector. As part of efforts to focus on core product portfolio, Julphar sold its Dubai-based subsidiary Gulf Inject, a local manufacturer of intravenous fluids, to GlobalOne Healthcare, a division of Abu Dhabi’s Yas Holding, in September last.
The Ras Al Khaimah headquartered company also signed a production agreement with Quantum Genomics. The latter is a biopharmaceutical company specializing in cardiac drug development to sell and manufacture Firibastat, a medicine used to control blood pressure for the Middle East, Africa, the CIS, and Turkey markets. The group has made significant progress with its transformation programme and strengthened the management with several new recruits during the past year. This strategic reorganization is facilitating the restore of Julphar as a leading pharmaceuticals company.
Vijay Valecha
The writer is Chief Investment Officer at Century Financial.
