Avalon Pharma profit jumps 72% to SAR 35M in 9M 2024; Q3 at SAR 3.9M
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Middle East Pharmaceutical Industries Co. (Avalon Pharma) posted a net profit of SAR 35 million in the first nine months of 2024, a leap of 72% from SAR 20.4 million in the year-earlier period.
Financials (M)
| Item | 9m 2023 | 9m 2024 | Change |
|---|---|---|---|
| Revenues | 209.27 | 258.01 | 23.3 % |
| Gross Income | 120.63 | 157.57 | 30.6 % |
| Operating Income | 29.60 | 43.79 | 47.9 % |
| Net Income | 20.42 | 35.04 | 71.6 % |
| Average Shares | 20.00 | 20.00 | - |
| EPS (Riyals) | 1.02 | 1.75 | 71.6 % |
Revenue jumped 23% year-on-year (YoY) to SAR 258 million in 9M 2024. Gross profit margins also improved during the nine-month period on better gross profit.
Revenue from private customers increased from SAR 152.7 million in 9M 2023 to SAR 168.3 million in the current period. The growth was mainly driven by the opening of new accounts and the sales of newly-launched products during the current period.
The nine-month profit growth was partially capped by the SAR 9.8 million YoY rise in selling and distribution expenses, with general and administrative expenses (G&A) also rising YoY by SAR 9.44 million in 9M 2024.
Current Quarter Comparison (M)
| Item | Q3 2023 | Q3 2024 | Change |
|---|---|---|---|
| Revenues | 60.75 | 81.06 | 33.4 % |
| Gross Income | 34.23 | 46.77 | 36.7 % |
| Operating Income | 6.27 | 6.94 | 10.7 % |
| Net Income | 2.88 | 3.87 | 34.4 % |
| Average Shares | 20.00 | 20.00 | - |
| EPS (Riyals) | 0.14 | 0.19 | 34.4 % |
The third-quarter net earnings climbed 34.4% to SAR 3.9 million, from SAR 2.9 million in Q3 2023. The three-month gross profit also soared by 36.63% YoY to SAR 12.55 million, thanks to the growth in sales volumes, the improved product variety and lower production cost per unit on the pick-up in output volumes.
This uptick was attributed to strong sales across all distribution channels in Q3 2024, compared to the same quarter of last year. Government sales led with an annual sales increase of SAR 11.63 million, thanks to product deliveries under a contract awarded by the National Unified Procurement Co. (NUPCO), followed by export sales (SAR 7.94 million) and private-sector sales (SAR 740,000).
The 177.6% YoY hike in export sales was mainly attributed to sales of new customers from Jordan, Yemen and Libya, alongside increased sales of existing clients in Kuwait and the UAE.
However, the company’s net income fell 82.3% from SAR 21.8 million in Q2 2024.
The quarterly profit drop came as the topline contracted by 19.85% quarter-on-quarter (QoQ) to SAR 81.06 million in Q3 2024, mainly due to demand seasonality as most private-sector clients tend to undertake procurement for goods in Q2 ahead of the summer and Hajj holidays. But this was partially offset by the improved public-sector performance on the back of product deliveries under the NUPCO-awarded contract.
Moreover, Avalon Pharma witnessed a QoQ sales slump in Q3 2024, which fueled a SAR 17.57 million sequential pullback in gross profit. However, this downturn was partially capped by a QoQ decrease in selling and distribution expenses for the current quarter.
Total shareholders’ equity, no minority interest, reached SAR 326.19 million as of Sept. 30, 2024, compared to SAR 272.82 million in the corresponding period of 2023.
Financial results (Million)
| Period | Revenues | Change | Gross Income | Change | Operating Income | Change |
|---|---|---|---|---|---|---|
| Q1 2024 | 75.82 | 37.3 % | 46.46 | 37.7 % | 12.43 | 320.1 % |
| Q2 2024 | 101.13 | 8.4 % | 64.34 | 22.2 % | 24.52 | 17.5 % |
| Q3 2024 | 81.06 | 33.4 % | 46.77 | 36.7 % | 6.94 | 10.7 % |
Profit Performance (Million)
| Period | Net Income | Change | EPS(Riyal) | Extraordinary Income/Expense | Net Profit Before Unusual Items | EPS Before XO Items |
|---|---|---|---|---|---|---|
| Q1 2024 | 9.37 | 1987.0 % | 0.47 | - | 9.37 | 0.47 |
| Q2 2024 | 21.81 | 20.8 % | 1.09 | - | 21.81 | 1.09 |
| Q3 2024 | 3.87 | 34.4 % | 0.19 | - | 3.87 | 0.19 |
Profitability
| Period | Gross Margin | OIBDA Margin | Net Margin Before Unusual Items |
|---|---|---|---|
| Q1 2024 | 61.30 % | 26.44 % | 21.09 % |
| Q2 2024 | 63.17 % | 27.01 % | 21.66 % |
| Q3 2024 | 63.10 % | - | 20.78 % |
Per Share Data (Riyal)
| Period | Shares Outstanding (M) | EPS (Riyal) | Adjusted EPS (Riyal) | Book Value (BV) |
|---|---|---|---|---|
| Q1 2024 | 20.00 | 3.79 | 3.79 | 15.77 |
| Q2 2024 | 20.00 | 3.97 | 3.97 | 16.86 |
| Q3 2024 | 20.00 | 4.02 | 4.02 | 16.31 |
Multiple Ratios (End of Period Price)
| Period | P/E | Adjusted P/E | Price/book |
|---|---|---|---|
| Q1 2024 | 38.68 | 38.68 | 9.28 |
| Q2 2024 | 33.12 | 33.12 | 7.81 |
| Q3 2024 | 34.80 | 34.80 | 8.58 |
Business Segments (Million)
Q3 2024
| Period | Private customers | Public Customers | Export customers |
|---|---|---|---|
| Q1 2024 | 54.78 | 12.11 | 8.94 |
| Q2 2024 | 71.78 | 18.08 | 11.28 |
| Q3 2024 | 41.77 | 26.88 | 12.41 |
Analysts Estimates (Million)
| Item | Q3 2024 (e) | Q3 2024 (a) | Change |
|---|---|---|---|
| Average | 14.81 | 3.87 | (73.9 %) |
Estimates vs Actual (Million)
| Item | Q3 2024 (e) | Q3 2024 (a) | Change |
|---|---|---|---|
| OSOOL AND BAKHEET | 6.52 | 3.87 | (40.7) % |
| SNB Capital | 8.72 | 3.87 | (55.7) % |
| GIB Capital | 18.00 | 3.87 | (78.5) % |
| Al Rajhi Capital | 26.00 | 3.87 | (85.1) % |
| Current | |
| Market Cap (M Riyal) | 2,468.00 |
| Enterprise Value (EV) (M) | 2,476.50 |
| Shares Outstanding ((M)) | 20.00 |
| EPS ( Riyal) (TTM) | 4.02 |
| Book Value (BV) ( Riyal) | 16.31 |
| Par Value ( Riyal) | 10.00 |
| Adjusted P/E (Last12) | 30.68 |
| P/E (TTM) | 30.68 |
| Price/book | 7.57 |
| Return on Average Assets (%) (TTM) | - |
| Return on Average Equity (%) (TTM) | 26.9 |
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