Follow Us on Google
•FX windfall wipes out prior N2bn loss
By Chukwuma Umeorah
Neimeth International Pharmaceuticals Plc has returned to profitability after three years of losses, posting a N1.48 billion profit before tax for the financial year ended December 31, 2025.
It was driven by debt repricing, cost discipline and strong revenue growth.
The pharmaceutical manufacturer reported that revenue rose 64 per cent to N7.37 billion from N4.49 billion in 2024, while it’s operating profit surged to N2.7 billion from N18.9 million in the prior year. Net profit stood at N982 million, compared to a loss of N885.3 million in 2024. Earnings per share improved by 43.7 kobo, moving from a negative 20.72 kobo to a positive 22.98 kobo.
Neimeth’s Managing Director/Chief Executive Officer, Valentine Okelu, while reviewing the company’s financial performance at its annual media briefing, described the results as a decisive turnaround, declaring an end to the loss cycle. “The era of losses has ended. Neimeth has returned to profitability,” he said.
A N2.3bn earnings swing in 1 year
For a company approaching its 70th anniversary, Neimeth has experienced cycles of expansion and contraction. In recent years, however, foreign exchange volatility, rising input costs and heavy finance charges had pushed the company into losses.
In 2024, Neimeth recorded a pre-tax loss of N854.5 million and a net loss of N885.3 million. The reversal to a N1.48 billion pre-tax profit in 2025 represented a swing of more than N2.3 billion within one financial year.
Okelu attributed the turnaround to three core levers; strong volume growth across key product lines, prudent cost management and the conversion and restructuring of foreign currency-denominated obligations. “This turnaround was driven by unwavering focus on fundamentals,” he said.
A critical contributor was the shift in the company’s foreign exchange position. After renegotiating foreign currency-based liabilities, Neimeth recorded a N48 million foreign exchange gain in 2025, compared to a loss exceeding N2 billion in 2024. That adjustment significantly altered the earnings outcome and strengthened the company’s balance sheet.
Finance costs contained at 40%
Despite the strong rebound in profitability, finance costs rose by 40 per cent during the year. Okelu clarified that the increase stemmed largely from interest payments on legacy debts.
“This finance cost has to do with the interest we paid on debts that were carried forward from previous years.”
He explained that the situation could have deteriorated further without engagement with lenders. “It would have been higher than this if not that we had to discuss with the banks and did everything we could to get the loan restructured. So instead of dumping heavy interest rates on the account with all the penalties, we’re able to get them restructured the loans for upwards of 10 years. So that we’ll be paying back the principal gradually while we’re paying the interest. So that’s how we’re able to even maintain it at 40 per cent . Otherwise, it could have been worse.”
The company said the move helped mitigate a key exposure faced by most pharmaceutical manufacturers, given their heavy reliance on imported raw materials and vulnerability to foreign exchange volatility. It added that the N48 million FX gain, replacing a N2 billion loss the previous year, underscores the impact of debt repricing and liability restructuring on overall performance.
Revenue growth and margin expansion
The company’s operational performance also strengthened considerably. Revenue rose to N7.37 billion, reflecting volume growth across major product categories. Operating profit climbed to N2.7 billion from N18.9 million, indicating improved operating leverage.
Despite persistent inflationary pressures, marketing and distribution expenses declined by 11 per cent, while administrative expenses were significantly optimised. Cost of sales was managed relative to volume expansion, preserving margins.
Okelu said, “My principle of doing that is to expand your revenue. So even if your revenue is dropping, and you’re able to triple your sales, you’re definitely doubling your earnings. So that’s what we plan to do.”
He added that while cost savings are important, sustainable earnings expansion will primarily come from scaling volumes and protecting margins.
Share price re-rating signal shareholders’ confidence
Neimeth’s share price appreciated from N5.80 at the beginning of trading in 2025 to N9.80 as of January 30, 2026, representing a 69 per cent increase. The stock gained more than 45 per cent over the course of 2025.
Earnings per share turned positive at 22.98 kobo from a negative 20.72 kobo previously, further reinforcing the market’s re-rating of the stock.
“Our objective is clear: deliver sustainable profitability and long-term value creation,” Okelu said.
Expansion and manufacturing capacity
While consolidating financial stability, Neimeth said it was expanding production capacity. Okelu confirmed that the company recently completed a major upgrade of its Oregun facility, strengthening manufacturing capability and positioning it to meet growing domestic demand.
In addition, construction of a new pharmaceutical manufacturing facility in Amawbia, Anambra State, remains on course. The facility is designed to meet World Health Organisation (WHO) standards.
Upon completion, the Amawbia plant is expected to serve as a centre of excellence for pharmaceutical manufacturing, enhance Nigeria’s local production capacity and position Neimeth to leverage opportunities under the African Continental Free Trade Area (AfCFTA). Okelu described the facility as part of the company’s long-term strategy to strengthen Africa’s medicine security.
Shareholders back N20bn capital raise
To support expansion and improve financial flexibility, shareholders approved a N20 billion capital raise at the Annual General Meeting held on June 23, 2025.The funds are intended to complete expansion projects, strengthen working capital, reduce financing costs and enhance production capacity.
“We intend to access the capital market at the appropriate time to execute part of this approved raise,” Okelu said. According to him, the timing and structure of the raise will depend on prevailing market conditions and strategic priorities.
Government policy and industry support
Okelu acknowledged that certain government initiatives, including duty exemptions on selected raw materials, have provided relief to manufacturers.
“If you imagine that also the government initiative, like duty exemption. Those duty exemptions, they can openly translate into reduction in costs,” he said. However, he noted that some key raw materials remain outside the exemption list, attracting full duties.
Beyond tariff relief, Okelu called for greater access to patient capital to support pharmaceutical manufacturing, given the long gestation period between facility investment and production.
“Pharmaceutical manufacturing is not like any other business. You have a very long waiting period between the time you start investing in the facility to the time that facility will start producing,” he said.
Competitive pressures and local procurement
Okelu also highlighted structural disparities between local manufacturers and foreign competitors. He pointed out that Nigerian manufacturers generate their own power and water, while competitors in countries such as India operate within government-supported industrial clusters and benefit from export rebates.
“The government from India today pays manufacturers for exporting,” he said.
He argued that procurement policies in public health facilities should recognise these cost structures and provide preference for locally manufactured medicines, particularly where price differences are within a narrow 10 to 15 per cent range.
Managing structural constraints
Okelu said the company has adopted a pragmatic approach to tackle issues such as energy costs, taxation and regulatory pressures,
“All the common problems that we know that have been living with us for a long time, I stopped bothering about them. Just make provisions for how to handle them and deal with the emerging problems that will now finally build a death blow on the business,” he said.
To combat counterfeiting, Neimeth has implemented authentication features on key brands. “Our key brands have scratch cards. You know, when you buy the product and scratch it, you can text the code and then it will confirm to you whether it’s genuine or not,” Okelu explained.
The company also periodically changes packaging features to make it more difficult for counterfeiters to replicate products.
Outlook for 2026 financial year
As the company approaches its 70th anniversary, Okelu said the priority remains sustained profitability.He reiterated that the foundation for recovery has been laid.
“We are repositioning Neimeth as a profitable, disciplined manufacturing company, a growth-oriented pharmaceutical brand, a resilient player in Nigeria’s healthcare value chain and a continental aspirant under AfCFTA,” Okelu said.
