Gulf Pharmaceutical Industries, the drug maker known as Julphar, attributed a 93 per cent increase in revenue in 2020 to "successful market strategies" in neighbouring markets, helping it to pare losses as it continues to implement a strategy to turn around its performance.
Revenue grew to Dh581.2 million as temporary import bans that had been in place in Saudi Arabia, Bahrain, Oman and Kuwait were lifted, meaning losses for the year were reduced by 42 per cent Dh293.2m, according to documents filed at Abu Dhabi Securities Exchange, where its share is traded.
“Our results demonstrate our effective approach that is flourishing on a solid foundation," Julphar's chief executive, Dr Essam Farouk, said. "The opportunity now is to accelerate our momentum and build on our strengths – enhance productivity by being operationally more efficient, especially after resuming the export operations following passing all GMP [Good Manufacturing Practice] audits from the regulatory authorities in Saudi Arabia.”
Julphar is a manufacturer of largely generic drugs which also makes insulin for diabetics and a range of personal care products. The company operates from 16 sites in the Middle East, Africa and Asia and employs about 5,000 people. Losses last year included Dh201.3m of one-off charges including asset write-offs, provisions for tender penalties and other charges relating to its transformation programme.
As part of this programme, the company restructured its capital base last year by reducing its capital base by Dh503m to extinguish historic losses and then raising Dh500m through a Dh1 per share rights issue, which was 2.3-times oversubscribed. Proceeds were used to pay off a shareholder loan.
It also appointed Mr Farouk as its new chief executive, recruited a new chief commercial officer and signed an agreement to sell its Julphar Bangladesh business. By year-end, the company's net equity increased to Dh1.07bn by year end, up from Dh878m at the end of 2019.
Other parts of its turnaround plan include divesting non-core businesses, forming new alliances to strenghten its product line-up and restructuring its bank debt to provide more working capital. The company has also cut manufacturing, selling and distribution costs.
“Covid-19 has been a major disruptor as well as a catalyst for positive change in business operations in both regional and global economies," said Julphar's chairman, Sheikh Saqer Humaid Al Qasimi. "We will steadily recover as the year progresses, as the expectation for economic growth in the countries that we operate in is more optimistic.”
