SPIMACO continues deleveraging with robust financial position: CEO

Jerome Cabannes, CEO of Saudi Pharmaceutical Industries and Medical Appliances Corp. (SPIMACO)

Saudi Pharmaceutical Industries and Medical Appliances Corp. (SPIMACO) did not fare well in Q4 2023, but the three-month results had little impact on the company, according to CEO Jerome Cabannes.

Cabannes told CNBC Arabia that SPIMACO's Q4 2023 losses reflect the company's ongoing efforts to improve its core business operations, as it follows a binding plan.

The CEO explained that SPIMACO has a robust financial position, but it is undergoing a corrective deleveraging process to increase profit margins.

He went on to say that Q4 2023 revenue was affected by the additional fees amounting to SAR 21 million paid by the company for the past years. Additionally, SPIMACO had to offset the higher costs of the stock-keeping units (SKUs) and reported a higher cost of financing due to an increase in interest rates.

Nevertheless, SPIMACO reported an 80% jump year-on-year (YoY) in the new products, adding 91 new SKUs, the CEO noted, expecting better results for the coming period.

“We managed to trim losses in 2023 on higher sales and decreased expenses,” said Cabannes, adding that the company cut expenses to revenue from 47.9% to 37.4%. Moreover, SPIMACO’s net profit margins rose 3% YoY, underpinning operating efficiency as well as its successful cost-cutting strategy.

SPIMACO's strategy will remain unchanged, with a continued focus on innovation growth as a key driver, as well as accelerating the implementation of the company's goals, efficiency, and productivity enhancement.

The company's vision is based on geographical expansions, mainly in the key four areas, with an emphasis on business operations outside the Arab and GCC regions.

SPIMACO aims to expand operations in several countries, which will present some challenges; however, access to international markets remains a critical goal for the company, Cabannes said.

The geopolitical tensions weighed on the company's ambitions, yet SPIMACO’s new 2024 strategy will build on opportunities in multiple markets, he added.

Cabannes also shed light on supply chain issues, saying the company had benefited during the COVID-19 pandemic and was trying to mitigate the impact of the supply chains disruption.

SPIMACO’s losses, excluding minority interest, shrank to SAR 13.2 million in 2023, compared to SAR 165 million a year earlier. Q4 2023 losses reached SAR 49.3 million, data compiled with Argaam showed.