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Higher finance costs, lower revenues hit Macro Group’s bottomline: Pharma and cosmeceuticals firm Macro Group turned to losses in 2023 on the back of a dip in revenues and higher financing costs, the company said in its latest earnings release (pdf). The company reported a net loss of EGP 273 mn for the year, compared to net income of EGP 174 mn in 2022. The company attributed the dip in income to “low operating profitability, a hike in one-off impairment losses on financial and non-financial assets, amounting to EGP 123 mn,” as well as a “significant increase” in net finance cost during the year, which reached EGP 63 mn.
Revenues decreased 28% y-o-y to EGP 526 mn on the back of price deductions offered to pharma chains during 4Q, as well as lower sale volumes, which dipped 29% y-o-y. This was “slightly offset by a 25% increase in average pricing and better sales mix dynamics,” the company said. Skincare contributed the lion’s share of the group’s revenues for the year, making up 39% of its revenues, followed by haircare with 18%.
But the company seems set on changing course: The company’s management team was given a shake up in the last quarter of the year, with changes made to the CEO, CFO, chief supply chain officer, and other senior management positions, along with “a thorough review of the company’s revenue cycle management and supply chain controls.”
What they said: “Over the year, our sales experienced a downturn due to reduced volumes ,exacerbated by liquidity constraints within Egypt’s pharma distribution network and substantial discounts offered in the fourth quarter under challenging market conditions and previous revenue cycle management issues,” Macro Group Chairman Ahmed El Nayeb said. “Nonetheless, there are positive indicators that the market-wide destocking phase is concluding, and we remain optimistic about sustained demand for our products,” he added.
Macro could step into new markets: The company plans to continue to prioritize exports to hedge against possible currency devaluations, El Nayeb continued. Despite its exports seeing a 22% y-o-y drop in 2023 that the company attributes to instability in its key markets in Syria, Yemen, and Sudan, the company is exploring new markets, including Saudi Arabia and South Korea, he added.
