Hyphens Pharma Posts Strong Revenue Growth in 9M2024 Despite Rising Costs

Hyphens Pharma International Limited, along with its subsidiaries, has reported an impressive 22.1% increase in revenue for the nine months ending 30 September 2024. The company’s revenue jumped from S\$117.5 million in 9M2023 to S\$143.5 million in 9M2024, showcasing the group’s robust performance in the current fiscal year.

Key Financial Highlights

For the third quarter of 2024, the group saw a revenue increase of 2.5% to S\$43.9 million, up from S\$42.8 million in the same period the previous year. The company’s gross profit also surged by 12.1%, reaching S\$17.0 million in 3Q2024 compared to S\$15.2 million in 3Q2023. Gross profit margin improved significantly from 35.4% to 38.7%.

Despite the revenue growth, net profit after tax for 3Q2024 decreased by 5.6% to S\$2.0 million, primarily due to higher distribution and manpower costs, alongside increased administrative expenses. These expenses were partially offset by higher gross profit and favorable foreign exchange gains due to local currency movements against the USD and EURO.

9M2024 Performance

The nine-month period ending 30 September 2024 saw several noteworthy developments:

• Revenue from the specialty pharma principals segment surged by 32.6%, driven by new distributorships with Laboratoires Gilbert S.A.S and increased sales from the medical aesthetics range.
• Proprietary brands segment revenue increased by 16.9%, thanks to higher sales of Ceradan® dermatological products and Ocean Health® health supplements.
• The medical hypermart and digital segment experienced a 3.0% revenue growth.

Overall, gross profit rose by 19.9% to S\$51.8 million, despite a slight decline in gross profit margin from 36.7% in 9M2023 to 36.1% in 9M2024. The group’s net profit after tax increased notably by 32.6%, reaching S\$7.5 million, benefiting from improved gross profit and a smaller proportional increase in operating expenses.

Important Information for Shareholders

Shareholders should note the following key points that may impact share value:

• The substantial revenue growth driven by new distributorship agreements and higher sales in proprietary brands could positively influence market perception and share prices.
• The decrease in net profit for 3Q2024 due to rising distribution and administrative costs may raise concerns about future operational efficiency.
• Favorable foreign exchange gains against major currencies like the USD and EURO could be a critical factor in maintaining profitability amidst rising costs.

Conclusion

Hyphens Pharma International Limited has demonstrated strong revenue growth and improved gross profits, though rising costs have impacted net profits. Investors should monitor the company’s strategic initiatives and cost management efforts closely, as these will be crucial in sustaining future profitability and shareholder value.

Disclaimer: This report is based on the company’s quarterly business update and is intended for informational purposes only. It does not constitute financial advice, and investors should perform their own research or consult with a financial advisor before making investment decisions.

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