A difficult 1H for Macro Group: Macro Group Pharmaceuticals saw revenue fall 54% y-o-y to EGP 155 mn on the back of “stock coverage restrictions on key pharma distributors and the execution of a one-time return of obsolete products” that were taken to “preserve product quality and protect market reputation,” the cosmeceuticals said in its latest earnings release (pdf). In the same period, its bottom fell 403% y-o-y to record a net loss of EGP 89 mn in 1H 2024.

Sales dropped 53% y-o-y to 3.3 mn units in the first half of the year, with Chairman Ahmed Elnayeb pointing to “reduced volumes and liquidity constraints within Egypt’s pharmaceutical distribution network” as driving the poor showing. Sales to key accounts contributed 57% of total revenue for the half, followed by direct sales which contributed another 33.6%. The remaining 8.9% in revenue was generated via pharmacy sales and exports.

But it’s a rosier picture q-o-q: Revenues in 2Q came in at EGP 96 mn — marking a 61% uptick on a quarterly by quarterly basis — which the company says signals “the beginning of a recovery as stock levels stabilize and the company shifts focus to top-line growth. Its bottomline went from a loss of EGP 41 mn in the first quarter to a net loss of EGP 11 mn in the second quarter.

Remember: Macro Group turned to losses in 2023 on the back of “low operating profitability, a hike in one-off impairment losses on financial and non-financial assets” as well as a “significant increase” in net finance costs during the year.

The path forward: “Bolstered by the support of its key shareholders, as evidenced by the shareholder loans totalling EGP 150 mn that have been injected, the group is confident in its ability to overcome current challenges and continue delivering value to its stakeholders, leveraging its strong market presence and industry expertise,” the press release said.

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