How Nigerian healthcare stocks performed in Q3 2022
Though Nigeria is still lagging in health sector development compared to her African neighbours in terms of budget and access to quality healthcare, the COVID-19 pandemic helped to open the eyes of the government and investors to a substantial healthcare spending gap.
There is a convincing reason for the development of world-class healthcare facilities across Africa, especially Nigeria whose medical tourism has continued unabated.
Historically, the healthcare sector has always been one of the sectors that benefit from an inflation and rate hike environment. So, market experts believe that from a macro standpoint, things are set for the better in the sector.
In the meantime, Nairametrics analysed how the share prices of companies quoted on the health sector of the Nigerian Exchange Limited (NGX) performed in Q3 2022.
Data obtained from the NGX showed that out of the seven healthcare firms quoted at the Exchange, only two stocks (i.e., Pharma Deko Plc and May& Baker Plc) recorded share price appreciation.
On the other hand, three stocks — Fidson Health Care Plc, GlaxoSmithKline Consumer Nigeria (GSK) Plc, and Neimeth International Pharmaceuticals Plc — recorded share price depreciation. Meanwhile, Ekocorp Plc and Morison Industries Plc closed flat.
Below is a closer look at the healthcare companies that gained and lost during the period under review.
Gainers
Pharma Deko Plc- 17.14%
- The shares of Fidson Healthcare Plc enjoyed a positive run during the third quarter of the year. The stock gained 17.14% in share price during the quarter, jumping from N1.75 to N2.05 per share. The company enjoyed buy-interests which drove up the market capitalization to gain N65 million to stand at N444 million at the close of trading on September 30, 2022, from the opening figure of N379 million at the beginning of trading on July 1.
- Hit by volatility in the operating environment, Pharma-Deko Plc had seen its half-year 2022 revenue decline by 19% to N252.810 million from N311.733 million in 2021.
- Loss after tax stood at N48.99 million from a loss of N8.27 million in 2021.
- The company closed the last trading day at N2.05 per share on the Nigerian Stock Exchange (NGX). Pharma-Deko began the year with a share price of N2.20 but has since lost 6.82%.
May & Baker Plc – 3.27%
- The share price of May & Baker Plc grew by 3.27% during the period under review, from N3.97 per share to N4.10 per share, lifting the market capitalisation to gain N224 million or 3.27% to close at N7.073 billion in September 2022 from the opening figure of N6.849 billion.
- May &Baker Plc reported an increase of 22.58% in revenue during the half year as it remained resilient in the operational environment amid volatility in the economy. The company reported revenue of N6.773 billion during the half year of 2022 as against N5.525 billion representing a growth of 22.58%.
- Profit after tax stood at N492.34 million from N555.27 million in 2021 representing a drop of 11.3%.
- The company closed the last trading day at N4.20 per share on the Nigerian Stock Exchange (NGX). May & Baker began the year with a share price of N4.02 and has since gained 4.48% on that price valuation.
Losers
Fidson Healthcare Plc-19%
- The shares of Fidson Healthcare Plc witnessed a negative run during the quarter. The healthcare firm listed on the NGX and the most capitalized healthcare company has lost 19% in share price during the half quarter, from N11.20 to N9.05. The negative sentiment drove down the market capitalization to lose N2.597 billion to stand at N20.769 billion at the close of trading on September 30, 2022, from the opening figure of N23.367 billion at the beginning of the quarter trading on July 1.
- Fidson Healthcare plc reported a 127.2% increase in Profit After Tax (PAT) to N2.7 billion in its half-year (H1) unaudited financial statement for the period ended June 30, 2022, from N1.2 billion achieved in the corresponding half-year results
- From the data submitted to the Nigerian Exchange Limited (NGX), the group grew its Profit Before Tax (PBT) by 128.8% to N4.005 billion in the half-year 2022 from N1.750 billion reported in the half-year 2021.
- The company reported a 57.6% growth in revenue to N20.38 billion in six months of 2022 from N12.93 billion accounted for in six months of 2021.
- Fidson closed the last trading day at N8.93 per share on the Nigerian Stock Exchange (NGX). Fidson Healthcare began the year with a share price of N6.22 and has since gained 43.6% year to date.
Glaxosmi.thkline Consumer Nigeria Plc-13.84%
- Shares of GlaxoSmithKline Consumer Nigeria (GSK) Plc also witnessed negative sentiment during the quarter of the year. The healthcare company lost 13.84% in price during the third quarter, from N6.50 to N5.60. The company witnessed sell pressure which drove down the market capitalization to lose N1.077 billion to close at N6.696 billion at the close of trading on September 30, 2022, from the opening figure of N7.773 billion at the beginning of trading on July.
- The pharmaceutical company recorded 49% revenue growth to N14.8 billion in the first half of 2022 from N9.9 billion in the first half of 2021.
- Also, the cost of sales was up 56% to N11.1 billion in H1’22 from N7.1 billion in H1’21. GlaxoSmithKline’s profit for the period jumped to N349.35 million in the first half of 2022, 482% from N60 million in the first half of 2021. Investment income rose to N44.7 million in the first half of 2022, up 77% from N25.2 million in the first half of 2021.
- GSK closed its last trading day at N5.40 per share on the Nigerian Stock Exchange (NGX). Glaxo Smithkline Consumer began the year with a share price of N5.95 but has since lost 9.24% year to date.
Neimeth International Pharmaceuticals Plc –9.67%
- The share price of Neimeth International Pharmaceuticals Plc dropped by 9.67% during the period under review, from N1.53 per share to N1.40 per share, reducing the market capitalisation to lose N284 million or 9.67% to close at N2.658 billion in September 2022 from the opening figure of N2.943 billion.
- Following financial and operational headwinds in the first half of the year, Neimeth International Pharmaceuticals Plc reported an 8.29% decline in revenue for the first half of the year 2022 to N1.826 billion as against N1.991 billion in 2021.
- Loss for the year stood at N133.652 million from a profit of N84.828 in 2021.
- The company closed its last trading day at N1.38 per share on the Nigerian Stock Exchange (NGX). Neimeth International Pharma began the year with a share price of N1.75 NGN but has since lost 21.1%.
Other firms that closed flat include:
- Ekocorp Plc –N5.79 per share
- Morison Industries Plc-N2.19 per share
