Hyphens Pharma International Posts Strong Revenue Growth and Profit Boost in 2024

Hyphens Pharma International Limited (SGX: HYPH) has released its quarterly business update for the third quarter and nine months ended 30 September 2024, showcasing robust financial performance and notable growth across key segments.

Key Financial Highlights

• 3Q2024 Revenue: S\$43.9 million, a 2.5% increase from S\$42.8 million in 3Q2023.
• 9M2024 Revenue: S\$143.5 million, a substantial 22.1% rise from S\$117.5 million in 9M2023.
• 3Q2024 Gross Profit: S\$17.0 million, up by 12.1% from S\$15.2 million in 3Q2023.
• 9M2024 Gross Profit: S\$51.8 million, an increase of 19.9% from S\$43.2 million in 9M2023.
• 3Q2024 Profit Before Tax: S\$2.8 million, a slight decline of 1.3% from S\$2.8 million in 3Q2023.
• 9M2024 Profit Before Tax: S\$10.2 million, a significant 46.4% increase from S\$7.0 million in 9M2023.
• 3Q2024 Net Profit After Tax: S\$2.0 million, a decrease of 5.6% from S\$2.1 million in 3Q2023.
• 9M2024 Net Profit After Tax: S\$7.5 million, a notable 32.6% rise from S\$5.7 million in 9M2023.

Revenue Drivers and Profit Margins

The revenue growth in 3Q2024 was primarily driven by improved sales in Singapore and Malaysia. The gross profit margin increased from 35.4% in 3Q2023 to 38.7% in 3Q2024. However, the net profit after tax declined by 5.6% due to higher distribution costs, increased manpower expenses, and rising administrative costs. These were partially offset by higher gross profits and favorable foreign exchange gains.

For the nine months period, revenue surged by 22.1%, propelled by:

1. A 32.6% increase in revenue from the specialty pharma principals segment, driven by new distributorship with Laboratoires Gilbert S.A.S and higher sales from the medical aesthetics range.
2. A 16.9% rise in revenue from proprietary brands, primarily due to higher sales of Ceradan® dermatological products and Ocean Health® health supplements.
3. A 3.0% improvement in revenue from the medical hypermart and digital segment.

Despite a slight decline in gross profit margin from 36.7% in 9M2023 to 36.1% in 9M2024, net profit after tax increased by 32.6%, benefiting from the increase in gross profit and a less than proportional rise in operating expenses.

Investor Insights

Shareholders should note the following key points:

• Strong revenue growth across all major segments, particularly in specialty pharma and proprietary brands.
• Strategic partnerships such as the new distributorship with Laboratoires Gilbert S.A.S are proving to be beneficial.
• The increase in distribution and administrative costs, while necessary for supporting growth, has impacted net profit margins.
• Favorable currency exchange rates have positively influenced profitability.

The robust financial performance, driven by strategic initiatives and market expansion, indicates positive future prospects for Hyphens Pharma International Limited. Investors should consider these factors as potential catalysts for share price movement.

Disclaimer: This article is intended for informational purposes only and should not be construed as financial advice. Always consult with a qualified financial advisor before making any investment decisions.

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