Medical Disposables and Supplies is reporting mixed results for its half-yearly performance, as it exceeds one billion dollars in sales but posted $13.4 million in losses.

The company, whose main activity is the sale of pharmaceuticals, medical disposables and consumables products, recorded year to date sales revenue for the six months ended September 30, 2020 of $1.14 billion, an increase of $17.96 million or 1.6 per cent when compared to the same period last year. The Pharmaceutical Division realised sales growth of $28.6 million or four per cent year-over-year.

The Medical Division saw a marginal decline in sales while the Consumer Division suffered a $9.9 million or 8.2 per cent decline in sales when compared to the same period last year. Total operational expenses for the period under review amounted to $234.6 million, increasing by $12.1 million or 5.8 per cent over previous year.

The jump in operational expenses was accounted for mainly by increases in the staff complement as well as increased selling and distribution costs, all of which are required to support the planned increase in business activity. Total non-operational expenses amounted to $41.9 million at the end of September 2020, up from $37.6 million in 2019.

A total of $44.9 million was spent on finance-related expenses, as the company, which started operation on November 27, 1998, inked a new banking arrangement to facilitate the expansion in business. At the same time, the loss on foreign exchange was reduced by $19.8 million when compared to year to date 2019. 

PROFIT REVERSES TO LOSSES

Medical Disposables, which is listed on the junior market of the Jamaica Stock Exchange, has wiped out the gains made for the comparable half-yearly performance in 2019 for the period under review in 2020. The company, based at 83 Hagley Park Road, Kingston 10, recorded a year to date loss of $13.1 million, down from a profit of $22.64 million at the same point last year.

Total assets grew by $169.40 million or 10.54 per cent from $1.60 billion to $1.77 billion for the period under review. This was due to increases in inventories, trade receivables and property, plant and equipment. Total liabilities as at September 2020 have increased by $101.65 million or 11.89 per cent from $854.9 million to $956.6 million over the prior year.

This was attributable to an increase in the working capital line of credit which is being used to facilitate growth and business expansion. Trade payables were reduced by $106.22 million to $152.65 million at the end of September 2020 from $258.86 million in September 2019. 

SECOND QUARTER OUT-TURN

For the second quarter, ended September 30, 2020, the company generated sales revenue of $630.16 million, an 11.52 per cent increase compared to the corresponding period in the previous year. The growth in sales is being driven by increases in the performance of the Pharmaceutical and Medical Divisions.

Year-over-year saw increases of 16 per cent or $62.9 million in pharmaceutical sales and 20.7 per cent or $21.6 million in sales of medical supplies. This year-over-year increase may be attributed to the partial reopening of the economy as well as the relaxation of some of the measures being employed to curtail the spread of COVID-19.

Medical Disposables incurred a loss after taxation of $6.03 million for the quarter, down $12.77 million when compared to the previous year. The major contributor to this loss is the $24.7 million increase in finance costs, mainly stemming from a one-off finance cost activity relating to the renewal of financing arrangements.

Total operational expenses increased by $12.10 million from $106.27 million in the second quarter of 2019 to $118.37 million in Q2 of 2020, representing an increase of 11.39 per cent. The movement was due to the costs associated with boosting the sales effort, particularly in the Consumer Division.

Operational expenses accounted for 18.78 per cent of sales revenue for the current period, down marginally from 18.81 per cent of sales revenue for corresponding period in the previous year. Total non-operational expenses increased from $18.86 million in Q2 of 2019 to $38.25 million in Q2 of 2020.