Emzor Pharmaceutical Industries Limited (Feb 2023)
Earnings remain a positive rating factor, underpinned by the sound revenue progression over the review period, despite the pervasive macro-economic headwinds. This is driven by a combination of higher traded volumes and increased selling prices. Nonetheless, operating costs have risen significantly in recent periods due to the spike in energy prices and the continuous Naira devaluation. Emzor has not been able to fully pass on the additional cost to customers, resulting in the EBITDA margin narrowing to 16.2% in FY21 from 20.3% in FY20. As of June 2022 (“1H FY22”), the margin improved slightly to 17.2%, supported by cost-saving measures and the contributions from new higher-margin products.