Directors of Nigeria’s indigenous and homegrown medical diagnostics and healthcare giant, Union Diagnostics and Clinical Services Plc, on Friday presented its score-card for the year ended December 31, 2016, showing faster growth in net profit, compared to revenue, indicating its successes in cost cutting measures in the face of thinning margins and bloating expenses, following which earnings per share jumped from 5.33 kobo in the corresponding period of 2015 to last full-year’s 8.92 kobo.
One explanation the directors therefore owe shareholders at the next annual general meeting to consider the report is why, despite the impressive performance, they should not share in the return on their investment, going by the growth in net profit for the period.
It may however not be unconnected with the company’s accumulated losses, which stood at N827.215m in 2014; from where it dropped to N637.876m the following year; and then N320.985m for the year under review (December 2016).
Revenue rose by N322m or 26.24% from N1.227bn in 2015 to N1.549bn in the 2016 full year, with cost of sales climbing to N743.75m, up from N616.191m; leaving gross profit at N805.729m, compared to the previous N611.676m.
Personnel expenses increased to N178.836m from N178.19; just as property rent increased to N36.824m, as against N25.234m in prior year; even as transportation and motor running expenses increased to N16.123m from N10.254m. Communication expenses dropped from N7.036m to N5.129m; depreciation and impairment increased from N45.853m to N47.545m; followed by legal, consultancy and other professional fees jumped to N29.7m from N6.806m. Repairs and maintenance climbed to N19.412m from N17.969m; other operating expenses rose to N95.571m from N77.811m; bringing total expenses to N429.145m, as against N369.158m in the corresponding period of 2015.
Operating profit therefore stood at N376.583m, from N242.518m; net finance expenses rose to N6.721m from N10.658m; following which profit before tax increased to N369.862m, representing a rise of about N138.003m, or 59.52% from N231.859m in 2015. Tax expenses of N52.971m, as against the previous N42.521m, left a net profit for the year of about N316.891m, as against N189.338m, a growth by about N180.524m or 95.34% within the period under review.