Cipla Quality Chemical Industries Limited, the latest entrant on the Uganda Securities Exchange (USE), has issued a profit warning, informing Shareholders and potential investors to exercise caution when dealing with the shares of the company on grounds that it will most likely record a loss for the financial year 2019/2020.
In a statement issued yesterday, the company’s Secretary attributed the loss to delays in collection of receivables from Republic of Zambia. She added that the Company’s revenue reduced after suspension of Sales to Zambia, which impact was partly offset by increased sales to international donor Organizations.
Doreen Pachuto, the company’s secretary also cited change in product mix in orders received which affected the gross margin as a result of the change referred above as well as increased competition in some of the Product ranges which in turn increased pressure on pricing in order to remain competitive.
“The Board with the help of Government of Uganda has engaged the Government of Zambia to expedite the settlement of the outstanding balance. Any funds collected from this engagement will result into reversal of the ECL to that extent,” Pachuto said.
They further revealed that despite other sectors hit by COVID-19 pandemic, they have continued with normal operations and they plan to continue to increase deliveries of life saving medicines should the need arise.
Further details of the Company’s financial performance will be disclosed in the Company’s financial statements to be published and circulated to shareholders..
CiplaQCIL announced its Initial Public Offer (IPO) by floating a total of 657,179,319 shares on to the Uganda Securities Exchange (USE) in August 2018. The total shares floated represented 18% of all the shares owned by the company. Cipla Ltd, the Indian pharmaceutical giant manufacturer.
The Initial Public Offer (IPO) kicked off with a market stimulating fee of Ush256.5 per offer share. However, CiplaQCIL’s share price on Uganda’s bourse has since fallen to Ushs101 per share as of the close of yesterday’s trading session.